May U.S. Inflation Data Falls Short of Estimates

May U.S. Inflation Data:

– CPI: 3.3% YoY (Estimate: 3.4%)
– CPI: 0.0% MoM (Estimate: 0.1%)

– Core CPI: 3.4% YoY (Estimate: 3.5%)
– Core CPI: 0.2% MoM (Estimate: 0.3%)

– U.S. short-term interest-rate futures surge following inflation data, with traders now anticipating a greater likelihood of Fed rate cuts.
 
– U.S. stock index futures extend gains in response to May CPI data.

– Fed swaps now fully price in a quarter-point rate cut in November.

– U.S. interest-rate futures indicate approximately a 70% chance of a Fed rate cut by September.

– Gold prices rise as U.S. May CPI unexpectedly slows.

The market has fully priced in two 25 basis points rate cuts in 2024 through Federal Reserve swaps.