Inflation data from the USA will be followed in global markets today.
The expectations regarding the important data to be announced at 15.30 TSI are as follows:
Consumer price index Monthly expectation: 0.2%
Consumer price index Annual expectation: 5.2%
Core consumer price index Monthly expectation: 0.4%
Core consumer price index Annual expectation: 5.6%
A Final Rate Increase Is Expected From The FED
Unless there is a surprise in the incoming data, the FED is expected to end the interest rate cycle by making a final 25 basis point rate hike in May. It seems likely that interest rates will remain at these high levels for a while after that.
The Fed removed the statement that "continuing rate hikes would be appropriate" in the previous rate decision, adding the statement that "some additional policy tightening would be appropriate". This change in expression raised expectations that the 25 basis point interest rate hike in May could be the last interest rate hike unless there is a surprise in the incoming inflation data.
Inflation data to be announced today will signal the direction the markets will follow until the interest rate decision on May 2-3. A future inflation data in line with expectations will strengthen the expectations that the rally will continue until May.
Minutes of Historical FED Meeting Will Be Announced
Today, in addition to inflation data, the minutes of the FED meeting for March will be announced. The meeting in March was the first FED meeting held after the banking crisis and it was the meeting that caused the FED to take a step back from its hard stance in monetary policy.
In today's meeting minutes, it will be seen how the FED made the decision to change the interest rate decision text and what its perspective is on the future.
After the inflation data, the FED minutes to be announced at 21.00 CET will increase the volatility in the markets.