On Wednesday, the United States Bureau of Employment Statistics will publish the country’s Consumer Price Index for the month of April. After that, the FOMC will comment on this. The data will be published 8.30am Eastern time.
Inflation is the main needle that moves the decision on interest rates. The interest rate has been maintained at 0.10% for months since the FED’s monetary policy stipulates variations in it based on the achievement of economic objectives. The stability of the economy, the recovery of employment and inflation around 2% are part of this monetary policy.
Changes in the interest rate are the way to influence the economy, therefore changes in economic indicators, product of economic activity, can also lead to the valuation of the currency.
The latest published data indicated that in March, the CPI increased 0.6% on a seasonally adjusted basis. Thus, without seasonal adjustment, it reached 2.6% for the last 12 months.
For the month of April, the interannual core CPI is expected to be 0.3%. Annualized, it would reach 2.3%
Although there is speculation about possible changes in interest rate policy, it is likely that this increase will be seasonal and not sustained, so that the FED will take early action on changes in rates or on the pace of bond purchases. Days ago, Powell said he does not foresee any changes in the measures in the short term.
The various projections and speculations in this regard generated effects on stocks and the dollar index. The same presented a fall in the day of Tuesday.
This data is likely to be of low impact since no large variations are expected in the final data.