Trump complains about Fed interest rates again

Galtero Lara
Junio 12, 2019

"The Euro and other currencies are devalued against the dollar, putting the U.S.at a big disadvantage", Trump tweeted on Tuesday without offering any evidence. Electricity prices were down 0.8%.

Policymakers from the US central bank are scheduled to meet on June 18-19 against the backdrop of rising trade tensions, slowing growth and a sharp step-down in hiring in May that has led financial markets to price in at least two interest rate cuts by the end of 2019.

With the dollar being on the backfoot since the latest eruption in trade tensions, the U.S. currency is looking slightly oversold and could be prone to an upside correction if the data come in at or above estimates. Monthly core price-rises, as well as a wider measure of annual inflation, also came in below estimates. Excluding the volatile food and energy categories, wholesale prices rose 0.2% in May from April and 2.3% from May 2018. Rent of primary residence rose 0.2%.Food costs rose 0.3% from the prior month after a decline in the prior period; Expenses for medical care commodities were down 0.4%.Economists surveyed by Bloomberg had forecast the core gauge would rise 0.2% from the prior month and 2.1% from a year earlier, with corresponding gains of 0.1% and 1.9% projected for the broader index. In the 12 months through May, the CPI increased 1.8%, slowing from April's 1.9% gain. The inflation data is released first on Wednesday at 12:30 GMT, followed by the retail sales report on Friday, at the same time.

Powell, in a speech last week, opened the door to interest-rate cuts after holding in May that below-target inflation was due to transitory factors. Treasury yields ticked up and the dollar rose to a session high against a basket of currencies after the release of the data. U.S.

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Compared to May of previous year, the core CPI is two percent higher, slowing slightly from the 2.1 percent pace of a month earlier.

Compared to May of a year ago, U.S. consumer prices are up 1.8%, slowing from the 2% increase in April. USA stock index futures pared losses slightly.

The Consumer Price Index - which tracks costs for household goods and services - rose a token 0.1 percent compared to April, matching analyst forecasts, the Labor Department reported. Apparel prices were unchanged in May after tumbling 0.8% in the prior month. But the prices for prescription medication fell 0.2%. The market-implied odds of a July cut increased, with Fed funds futures now indicating nearly a quarter-point of easing in the next two months. Although the Fed does not monitor CPI inflation as closely as it does the core PCE price index, a fall in the CPI rate would point to cooling inflationary pressures in the economy.

He argued that China, with closer political control of its central bank, could devalue its currency or use other tools to offset the tariffs Trump has imposed on Chinese imports.

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