Week Ahead: Inflation data, US Fed policy, global cues among key market triggers as Nifty 50 eyes 23,500 this week

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The upcoming week will also place a significant focus on monetary policy decisions of central banks, as the US Federal Reserve will begin its two-day policy meeting on June 11. The US Fed will announce its interest rate decision after its two-day policy meeting on Wednesday, June 12, 2024.Analysts noted that the US economic landscape has shown signs of moderation in recent months.

The core personal consumption expenditures (PCE) inflation, a key measure watched by the US Fed, slowed to an annualised rate of 3.5 percent in April.‘’This decrease indicates that inflationary pressures are easing, which is a positive development for the economy. At the same time, the job market has shown signs of rebalancing.

Payroll growth in April was 175,000, down from an average of 269,000 in the first quarter of the year,'' said Alex Volkov, Market Analyst at VT Markets.Despite these developments, the US Fed remains cautious. Fed officials need more evidence of sustained progress in controlling inflation before they begin reducing the federal funds target range.

Market participants expect no rate changes at the upcoming June meeting, but there is potential for a rate cut in the fourth quarter of this year. ‘’The post-meeting statement is anticipated to include updates to reflect lower run-off caps for Treasury securities and acknowledge recent data suggesting a reduced threat of price re-acceleration.