China's Central Bank Cuts Rates to Boost Post-COVID Recovery

This week, the market was focused on the CPI reading for May and the Fed's benchmark rate decision. The consumer price index cooled, registering a 4% year-on-year increase, its slowest pace since March 2021. However, core inflation (excluding energy and food) fell at a slower pace, 5.3%. Faced with these readings, the Federal Reserve chose not to raise rates this time, the first pause after 15 months of increases. However, while Chairman Powell did not commit to a new hike at the July meeting, he projected that the rate could rise another 50 bps before the end of the year. The consumer confidence index for June was 63.9 above the 60.1 expected by analysts and an improvement over the May figure of 59.2.Secretary of State Anthony Blinken will travel to Beijing this weekend to meet with the Chinese government with the intention of easing tensions between the two superpowers.

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