The Day at a Glance | June 13 2023

*General inflation in the US became more moderate in May; underlying inflation remains high. 

*This Tuesday, the Federal Reserve´s monetary policy meeting kicks off – amidst high uncertainty; a “jump” is expected in tomorrow´s decision. 

*Former President Donald Trump will be prosecuted in Miami in relation to the mishandling of classified documents; this will be his second appearance in court after pleading “not guilty” for other charges in New York in April.  

*The rise in wages in the United Kingdom is surprising and is reinforcing the likelihood of a further increase in interest rates. 

*China cut its short-term loan rate for the first time in 10 months in order to stimulate its economy´s recovery. 

Economic environment

General inflation in the US became more moderate during May; underlying inflation remains high. General inflation recorded a slightly positive surprise by setting 0.1 percentage points below the consensus estimate (4.0% y/y vs 4.9% prev.). This was the slowest increase since March 2021. On a monthly basis, inflation recorded a 0.1% figure compared to the previous month´s 0.4%. This slowdown is mainly explained by the energy sector, which logged a -3.6% monthly figure after a slight 0.6% expansion in April, while food prices returned to a recording positive figures (0.2% month to month) after two months of no change. On the other hand, the underlying component maintained a monthly 0.4% figure, leading to an annual 5.3% reading (5.5% prev.). Within this component, the price of goods recorded a 0.2% increase, while housing prices logged a slight acceleration (to 0.6% m/m from a previous 0.4% figure). Consequently, this reading suggests that the FED will “skip” tomorrow´s monetary policy decision – but will maintain its hawkish stance. This is because the Federal Reserve could carry out a new hike in its July meeting after assessing more economic data.