Inflation Hits 3-Year Highs: Is the Fed Ready To Hike Rates? - State Street SPDR S&P 500 ETF Trust (ARCA:

Inflation hits its hottest reading in more than three years, but economists largely expect the Fed to hold rates at next week’s meeting as the Iran energy shock lingers. The May CPI rose 0.5% month over month and 4.2% year over year, with core CPI at 2.9% and a 0.2% monthly gain. Market pricing indicates about a 98% probability the Fed will maintain its target range on June 17, though some traders anticipate a 25-basis-point hike later in the year. Energy shocks, driven by the Strait of Hormuz disruptions, dominate the numbers, while other components show modest strength. The SPDR S&P 500 ETF was down about 1.3%, reflecting a cautious mood ahead of the policy decision. Analysts warn that persistent energy pressures could push the Fed toward a slower tightening path, even as core inflation remains stubborn.