Analyst: U.S. inflation may hinder the Federal Reserve's interest rate cut within the year

IG Group analyst Jeremy Naylo stated that the Federal Reserve's interest rate decision will be a turning point this week, even though we expect no changes in rates. Prior to this, the U.S. Statistics Department will release May CPI data.

This is likely to indicate that the inflation stickiness we have seen will continue. The core CPI in the United States for May is expected to increase by 3.5% year-on-year, but what really worries us is the service industry. Over the past two months, US service sector CPI has been rising with an increase of 5.3% year-on-year in April.

Daily FX foreign exchange analyst Richard Snow told traders that people generally expect so-called "super-core" inflation - i.e., service sector inflation minus housing inflation - to at least maintain a year-on-year increase of 5.3% over the past two months, which could mean there's almost no room for Fed cuts.