SHY - The May CPI Report Is An Outlier And The Fed Seems To Agree

2024-06-12 18:52:46 ET

Summary

• The Fed acknowledged the "cool" May CPI but signaled a tighter monetary policy, suggesting that the May CPI is an outlier.
• May CPI inflation surprised positively, with headline CPI flat at 0% and core CPI up only 0.16%.
• Inflation moderated due to falling energy prices and transportation costs, but other sectors like food away from home and shelter saw increases.
• Despite May's low inflation readings, consumer and business surveys indicate inflation expectations remain high, also suggesting May's CPI may be an outlier.
• The Fed is still in a higher-until-recession mode, suggesting the S&P500 is facing a recessionary bear market.

The May CPI inflation surprise

The CPI inflation for May positively surprised, coming down below expectations. ...

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