US Fed Rate Hike In Sight As Inflation Picks Up

Fed Rate Hike: U.S. inflation and consumer spending in on a surge fuming expectations of another Federal Reserve Hike. The US Bureau of Economic Analysis on Friday reported that the Personal Consumption Expenditures (PCE) Price Index stood at 4.4% in April 2023 compared to 4.2% in March. Experts have advised investors to brace themselves for the Fed Hike.

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Will Fed Move Interest Rates Up?

According to the data, this is the first monthly recorded increase in PCE inflation since October 2022. It is important to note that this is the most preferred indicator utilized by the Fed to measure inflation.

Experts suggest that interest rates future now anticipating a 25 bps rate hike in June. The probability of a hike in June now stands at 57% while the is a 27% chance of another hike in July. Meanwhile, investors can now expect an interest rate cut after November.

It added that the market now expects only 1 rate cute in 2023. Earlier, investors anticipated around 4 cuts. However, no more rate hikes were expected just 2 weeks ago. Meanwhile, there are around 70% of at least 2 more hikes.

The rise in inflation data hasn’t affected the financial market for now. Stocks price rose despite facing a deadline on the debt ceiling. Dow Jones Industrial Average (INDEXDJX: .DJI) climbed by 341 points, 1.02%. While S&P 500 (INDEXSP: .INX) gained 48 points and Nasdaq Composite jumped by 218 points. Read More Fed Rate Hike News Here…

The global crypto market also printed green indexes after the announcement of PCE inflation data. Its cumulative market cap surged by 1% to stand at $1.12 trillion.

Bitcoin (BTC), the world’s largest cryptocurrency price jumped by almost 2% after trading low in the last 24 hours. Bitcoin is trading at an average price of $26,806, at the press time, inching ahead to regain the $27K level. However, its 24 hour trading volume is down by 11% to stand at $13,1 billion.

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