Surprise Dip In May Inflation Raises Hopes For Pause In Fed Rate Hikes
Portfolio Pulse from Piero Cingari
May's inflation rate dipped to 4% YoY, lower than the expected 4.1%, raising hopes for a pause in Fed rate hikes. The dollar fell, while S&P 500 futures and gold prices rose following the news.
June 13, 2023 | 12:50 pm
News sentiment analysis
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POSITIVE IMPACT
Gold prices, closely tracked by the SPDR Gold Trust ETF (GLD), rose 0.4% following the release of May's lower-than-expected inflation data.
The lower-than-expected inflation data reduces the likelihood of the Fed raising interest rates, which is generally positive for gold prices. As GLD tracks gold prices, it is positively impacted by this news.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
S&P 500 futures jumped 0.3% as investors reaffirmed their conviction that the Fed will hold interest rates unchanged. The SPDR S&P 500 ETF Trust (SPY) tracks the S&P 500 index.
The lower-than-expected inflation data supports the case for the Fed to pause rate hikes, which is generally positive for stocks. As SPY tracks the S&P 500 index, it is positively impacted by this news.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) fell 0.5% following the release of May's lower-than-expected inflation data.
The lower-than-expected inflation data reduces the likelihood of the Fed raising interest rates, which in turn weakens the dollar. As UUP tracks the dollar, it is negatively impacted by this news.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100