The second week of June 2023, is an important week because this week determines the direction of interest rates for this month. Be aware that interest rates are at the core of economic growth and cycles. This is because the investors and the main economic players make the interest rate as their reference and core in managing business.
On Wednesday at 2.00 am, the "Federal Reserve of America" (FED) will announce the direction of interest rate increases for June 2023. However, before that, the market will be served with the release of inflation rate data, the "Consumer Price Index" (CPI) tonight .
Consumer Price Index (CPI)
Last April, the consumer price index increased by 0.4%, at the same time showing an annual percentage change down to 4.9%. This is because the price of household goods and the cost of "gas" have decreased (which has been measured through the data of the "Producer Price Index") at the same time giving a sigh of relief to the consumer sector.
As for tonight's CPI data release, we expect the consumer price index data to remain unchanged in May 2023 due to falling "gas" prices and stable food cost prices.
Time Data Expected Data Previous Data
Tuesday, 8.30PM CPI m/m 0.0% 0.4%
Tuesday, 8.30PM CPI y/y 4.0% 4.9%
Tuesday, 8.30PM Core CPI m/m 0.4% 0.4%
FED Interest Rate
The question is whether or not the Fed will raise interest rates?
At the last FOMC meeting on May 3, 2023, the Fed gave an indication that the phase of aggressive interest rate hikes is coming to an end. We have seen the FOMC committee raise the funds interest rate at 5.00% – 5.25% (25 basis points).
Market Review
After the interest rate hike last May, economic data has shown strong growth.
FOMC committee members including its chairman Chair Powell and Governor Jefferson have been seen to maintain interest rates at the FOMC meeting tomorrow with the aim of giving the economy room to adapt to the current situation.
The expected meeting at the FOMC tomorrow is expected to maintain interest rates, but we think the interest rate hike will be done at the FOMC meeting on July 26, 2023.
At the FOMC meeting tomorrow, the committee will release the first quarter report "economic projection. We will see the full plan and direction of the American economy in 2023.
June 2023 FED Funds Rate Data
Rate Date
(%) 1 st
(%) 25th
(%) 75th
(%) 99th
(%) VOLUME
($Billions) TARGET RATE/RANGE
(%)
06/09 5.08 5.05 5.06 5.08 5.30 133 5.00 – 5.25
06/08 5.08 5.05 5.06 5.08 5.30 136 5.00 – 5.25
06/07 5.08 5.05 5.06 5.08 5.30 137 5.00 – 5.25
06/06 5.08 5.05 5.06 5.08 5.30 144 5.00 – 5.25
06/05 5.08 5.05 5.06 5.08 5.30 136 5.00 – 5.25
06/02 5.08 5.05 5.06 5.08 5.30 141 5.00 – 5.25
06/01 5.08 5.05 5.06 5.08 5.35 131 5.00 – 5.25
