U.S. consumer inflation slows in May on cheap energy, used cars

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U.S. consumer inflation slows in May on cheap energy, used cars

The Fed does not want that, partly because the U.S. is doing very well economically in many areas. Earlier, China's stocks rose on Beijing easing financing rules to boost local government spending on public works and expectations of lower central bank rates globally.

Trump called the low inflation in the USA a good thing. "Further escalation of the US-China trade dispute would increase the likelihood of a pre-emptive move from the Fed". The CME FedWatch Tool now shows a 17.5 % chance that the Fed will ease rates at the June 19th meeting. The Fed will update its economic forecasts as well as its famous dot-plot chart at its June meeting, with the big question being on whether or not policymakers will foresee a rate cut in their projections.

Gone will be the promise of policy patience that's characterized Federal Open Market Committee statements since January.

Fed Chair Jerome Powell and other officials insist they can only consider what is happening in the economy and the appropriate policy response, and not try to second guess what the administration does or might do.

The dollar has suffered a setback after the latest escalation of the U.S. The federal funds futures market showed a quarter-point cut fully priced in for July, and indicated nearly 70 basis points of easing by the end of 2019.

It is certainly not the first time that Trump has criticized the Fed's policies. However, pricing in the overnight-index-swap market now implies as many as three rate cuts could be likely before the end of 2019. As he is part of the voting team that sets Fed rates his comments spurred investors and market forces. "But we're not in a tranquil environment" even though Trump dropped his threatened tariffs on imports from Mexico.

While the economy hasn't taken a dramatic tumble, escalated trade tensions with both China and Mexico are worrying investors, WSJ reported.

USA crude rose 0.69% to $53.63 per barrel. "They haven't listened to me".

The central bank's current target range for the fed funds rate is 2.25% to 2.5%. Indeed, Fed Vice Chairman Richard Clarida suggested in May that the low level of inflation might be a reason to ease policy.

Those fears have grown as recent data have pointed to a global economic slowdown. The president has often called that raising interest rates is bad for the USA economy.

Speaking of the Fed's policymaking committee, the president expressed exasperation that the panel raised its key short-term rate four times previous year and acted to reduce the Fed's balance sheet - action that had the effect of tightening credit - despite his public warnings against it.

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