Inflation is moderating --- no interest rate hikes coming now

(Moody’s Analytics, “Divergent Data On U.S. Economic Growth,” pg online @ https://www.moodysanalytics.com/-/media/article/2023/weekly-market-outlook-divergent-data-on-us-economic-growth.pdf //um-ef)

The U.S. economic calendar is packed. The highlights will come Tuesday and Wednesday with the release of consumer price index data for May followed by the June meeting of the Federal Open Market Committee. We expect that inflation will continue to moderate, slowly, and the Federal Reserve will take this opportunity to pause interest rate hikes for the first time since the tightening cycle began. The NY Empire State manufacturing survey and the Philly Fed survey will provide a first look at factory performance in June, and we expect a continuation of the weakness that has plagued the industry this year. Jobless claims will remain in focus as they provide labor market insight with the shortest lag time. Initial claims jumped back above 260,000 last week after falling in recent reports. While still short of the breakeven level—which we currently estimate to be around 265,000—it will be important to note any sustained increase in the level of claims, which would likely signal a deceleration in monthly job gains. Other key data will include the NFIB small business survey, producer price index, retail sales, industrial production, and the University of Michigan consumer sentiment survey.