Explainer-Charting the Fed's policy path

investing.com:

By Howard Schneider

(Reuters) -U.S. central bankers have signaled they are likely to raise interest rates at the end of their two-day policy meeting on Wednesday after holding the benchmark overnight interest rate steady in the 5.00%-5.25% range in June. Data since then has kept that decision on track. Here's a guide to some of the numbers shaping the policy debate:

RETAIL SALES (Released on July 18, next release on Aug. 15): Retail sales rose less than expected in June, increasing just 0.2%. But a separate measure known as «core» retail sales, which better reflects underlying economic growth, posted a strong 0.6% gain. The overall slow pace of increase may indicate the start of a pullback by consumers, something that the Fed has been anticipating and, through its rate hikes, trying to encourage.

INFLATION (released on July 12, next release on July 28): Consumer price inflation tumbled in June to a 3% annual rate, from 4% in May, the slowest pace since March of 2021 and a sign of what some economists expect is the start of steady progress for the Fed's inflation fight.

It likely won't dissuade officials from a rate hike at this week's meeting, a move that is widely expected in financial markets. Prices based on the Fed's preferred inflation gauge increased 3.8% in May on a year-over-year basis, but underlying inflation pressures remained stuck in overdrive, with the core personal consumption expenditures index at 4.6%.

But it could begin to undercut arguments for more hikes beyond that point, and may shift the Fed's relentlessly hawkish tone.

EMPLOYMENT (Released on July 7, next release on Aug. 4): The U.S. economy added 209,000 jobs in June, fewer than expected and part of a continued pullback towards levels seen in