Thumbs up for lower US inflation

Market interest rates fell and Wall Street stock exchanges rose in futures trading after fresh figures showed that US inflation fell in May. The market hopes that lower inflation will pave the way for American interest rate cuts.

» Updated:

» Published:

Thumbs up for lower US inflation
Photo: Susan Walsh AP/TT

Share this article

Market interest rates fell and Wall Street stock exchanges rose in futures trading after fresh figures showed that US inflation fell in May.

The market hopes that lower inflation will open up for American interest rate cuts.

Inflation in the US fell to 2.6 percent in May, according to the so-called PCE measure. This can be compared to 2.7 percent in April.

The decline was in line with expectations. Economists' average forecast was a PCE inflation of 2.6 percent in May, according to Bloomberg's compilation.

The underlying PCE inflation in May was 2.6 percent, compared to 2.8 percent in April.

The market reaction was clear after the figures. The yield on the US 10-year government bond fell 0.05 percentage points to 4.27 percent, and the dollar was pushed down a few ören against the krona and other currencies.

The PCE inflation is seen by the US central bank Federal Reserve (Fed) as the most important price increase measure when decisions on future interest rates are to be made. The Fed's interest rate determines, in turn, the risk appetite globally and how much maneuvering room other central banks have for their interest rate decisions.

In contrast to the more common CPI measure of inflation, which is based on a basket of goods, the PCE inflation is calculated on what is actually consumed.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Trump Proposes Ending Quarterly Reports for Wall Street Companies

Trump Proposes Ending Quarterly Reports for Wall Street Companies

EU Regulators Seek Stricter Crypto Supervision by ESMA

EU Regulators Seek Stricter Crypto Supervision by ESMA

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

China Investigates Nvidia for Competition Law Violations

China Investigates Nvidia for Competition Law Violations

USA and China Near Resolution on TikTok Deal

USA and China Near Resolution on TikTok Deal

Black Soldier Fly Oil and Protein Developed for Animal Feed

Black Soldier Fly Oil and Protein Developed for Animal Feed

Basmati Rice Dispute Stalls EU-India Trade Agreement

Basmati Rice Dispute Stalls EU-India Trade Agreement

Stock Market and Krona Rise as Week Begins

Stock Market and Krona Rise as Week Begins

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Swedes Report Decreased Satisfaction with Banks This Year

Swedes Report Decreased Satisfaction with Banks This Year

Fashion Trade Sales Rise for Third Consecutive Month

Fashion Trade Sales Rise for Third Consecutive Month

Powell's Rate Signal Influences Swedish Households Too

Powell's Rate Signal Influences Swedish Households Too

Asian Markets Rise Despite Weak China Data

Asian Markets Rise Despite Weak China Data

ANZ Bank Faces Record Fines for Bond Deal Misconduct

ANZ Bank Faces Record Fines for Bond Deal Misconduct

Trump Welcomes Foreign Investment and Workforce in the USA

Trump Welcomes Foreign Investment and Workforce in the USA

Government Boosts Support for Sweden's Regional Airports

Government Boosts Support for Sweden's Regional Airports

Klarna CEO: Embracing "Swedishness" as a Key Asset

Klarna CEO: Embracing "Swedishness" as a Key Asset

Handelsbanken Swish Payment Disruption Resolved

Handelsbanken Swish Payment Disruption Resolved

Government Proposes Increased Export Credit Guarantees for Swedish Companies

Government Proposes Increased Export Credit Guarantees for Swedish Companies

AstraZeneca Halts UK Research Facility Expansion Plans

AstraZeneca Halts UK Research Facility Expansion Plans