Implications of US inflation slowdown

The US indices are trending upward

By Laila Eid | @Laila Eid | 13 June 2023

12 June _ US CPI
  • The Federal Funds Rate is currently at 5.25%, its highest level since 2007

  • The US dollar index declined by 0.19% following the news of slowing inflation in the US

  • The Dow Jones index reached its highest level since the beginning of May 2023

US inflation moderates, supporting the position of the US federal reserve

The US Consumer Price Index reading was released, indicating that US inflation slowed to 4.0% in May compared to the previous reading of 4.9%. This marks the lowest level since April 2021. Core inflation also experienced a slowdown, reaching 5.3% on an annual basis. Additionally, on a monthly basis, inflation recorded a 0.1% increase, following a 0.4% increase in April. These figures may reinforce the position of the US Federal Reserve ahead of their upcoming decision, as the bank will likely consider this data.

Gold reacts to news release; US indices show positive performance

Leading up to the news release, gold experienced a slight decline. However, following the release, we observed a divergence in the movement of the precious metal, fluctuating between the range of $1946.5 and $1971 per ounce. Meanwhile, the US indices displayed a positive performance, driven by the growing possibility that the Federal Reserve would halt its monetary tightening policy at its upcoming meeting and maintain the interest rate at 5.25%.