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All Eyes on CPI and the Fed Today

All Eyes on CPI and the Fed Today By Hardika Singh

No meaningful policy changes are expected at today's Federal Reserve meeting, with the focus instead centering on new quarterly rate projections, the so-called "dot plot." A wild card in the mix is the Labor Department's report for May inflation, set to be released about half an hour before the meeting. A surprise reading could lead policymakers to make last-minute adjustments to their projections. Meanwhile, the Port of Baltimore is back in business following weeks of recovery efforts. And the founder and former CEO of now-bankrupt artificial-intelligence recruitment startup Joonko is charged with defrauding investors. Read on for this news and more.

Top News Federal Reserve Policy Update: What to Watch

The information out of this Federal Reserve meeting that is of the greatest interest to investors-whether a majority of officials anticipate two rate cuts this year or just one-feels like a jump ball. That is rare for the Fed. Meetings are usually planned so that the main development-a change in interest rates or new guidance in its statement-has been hinted at well ahead of time. Wednesday is different. There aren't any big changes anticipated, putting the spotlight on officials' quarterly rate projections . Moreover, the May inflation report at 8:30 a.m. ET could shape the economic and interest-rate projections that are released hours later.

U.S. Economy Port of Baltimore Fully Restored After Key Bridge Collapse

The main channel to the Port of Baltimore fully reopened, nearly 11 weeks after a cargo ship lost power and slammed into the Francis Scott Key Bridge, shutting down one of the nation's busiest waterways.

Financial Regulation SEC Charges Founder of AI-Powered Hiring Startup Joonko With Fraud

The Securities and Exchange Commission charged the founder and former chief executive of a now-bankrupt artificial-intelligence recruitment startup with defrauding investors out of at least $21 million, the latest sign the regulator is keeping watch on the bold claims made by AI startups and investors about the technology's capabilities.

Forward Guidance Wednesday (all times ET)

8:30 a.m.: Consumer price index

2 p.m.: U.S. interest rate decision

Thursday

8:30 a.m.: Producer price index

8:30 a.m.: Initial claims

12 p.m.: Economic Club of New York event with Treasury Secretary Janet Yellen and New York Fed President John Williams

Research Bank of England Rate Cut After September Should Lift Sterling

If the Bank of England starts cutting interest rates later than September this could enable the sterling to rise, particularly against the euro, says Chris Weston, head of research at Pepperstone, in a note. "The debate is still firmly focused on whether the BOE will cut in September, where we see a 50/50 chance [of] this priced in for this meeting," he says. - Emese Bartha

Basis Points A rocky stretch in the debt markets has American savers turning to Wall Street pros for help picking their bonds. About $105 billion has flowed into actively managed fixed-income funds on a net basis this year, compared with $74 billion for funds that choose investments by tracking an index, according to Morningstar Direct data as of April 30. That marks the first time flows into active bond funds topped those into passive funds during the period since 2021. - Vicky Ge Huang A new kind of shareholder activism is rattling companies: "anti-woke" agitators . Shareholders at dozens of big companies, from GE Aerospace to UPS, are voting on proposals opposing environmental and social initiatives this year. Investors backed by conservative groups are suing Target and other companies for their progressive stances. And companies are muting their focus on diversity, equity and inclusion initiatives as DEI programs come under legal and political threat. - Sarah Nassauer and Theo Francis The euro's move against the U.S. dollar in advance of and since the European Central Bank's decision to lower its key rate have been too small to have an impact on inflation in the eurozone, ECB Chief Economist Philip Lane said Tuesday. The ECB's Thursday decision to lower its key rate to 3.75% from 4% widened the gap with the Federal Reserve. That risked a weakening of the currency against the U.S. dollar, raising prices of imported goods and services and a fresh source of inflationary pressures. - Paul Hannon The U.K.'s economic recovery sputtered to a halt at the start of the second quarter, underlining the scale of the task facing the next government in lifting the country out of a long period of stagnation. Gross domestic product was flat in April compared with a month earlier, official data showed Wednesday. This was in line economists' expectations, according to a survey by The Wall Street Journal ahead of the data's release. - Joshua Kirby China's consumer prices rose mildly last month while its factory-gate prices continued to fall, suggesting persistently tepid demand as Beijing continues to try to lift lackluster consumption. The country's consumer-price index rose for a fourth consecutive month in May, edging up 0.3% from a year earlier, the National Bureau of Statistics said Wednesday. That matched the 0.3% expected by economists in a Wall Street Journal poll and was unchanged from April's increase. - Singapore Editors Thailand's central bank held its policy rate steady , defying pressure to start easing as the economy begins to show signs of life. The Bank of Thailand said Wednesday that its policy committee voted 6-to-1 to keep its one-day repurchase rate unchanged at 2.50%. The move keeps the rate in the Southeast Asian country at a decade high. - Kosaku Narioka Experts surveyed by Singapore's central bank have maintained their economic growth forecast for Singapore this year, though the composition of growth drivers has changed. The Monetary Authority of Singapore's June survey, released Wednesday, showed that the median projection of economists and analysts is for gross domestic product growth of 2.4% in 2024. - Amanda Lee Australian consumer confidence recorded its biggest weekly fall of the year last week following data showing the economy remained largely lifeless in the first quarter, amid recent warnings from the Reserve Bank of Australia that further interest rate increases may still be required. Consumer confidence declined 3.5 points over the week to 77 points, according to a survey by pollster Roy Morgan and the ANZ Bank. - James Glynn Global oil markets are headed toward a major glut this decade, according to the International Energy Agency. The global energy watchdog cited surging supplies and slowing demand growth for crude thanks to lower-emissions energy sources. - Giulia Petroni About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to [hardika.singh@wsj.com].

This article is a text version of a Wall Street Journal newsletter published earlier today.

 

(END) Dow Jones Newswires

June 12, 2024 07:16 ET (11:16 GMT)

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