The Federal Reserve announced a decision to maintain interest rates unchanged between 5.25% and 5.5% at the June 11-12 meeting, maintaining them at 23-year highs. 

The Fed’s policy statement explains that the Federal Open Market Committee considers the risks facing achieving better employment and inflation goals are moving towards a better balance, but the economic outlook remains uncertain. 

More crucially, the Fed expects a single interest rate cut this year instead of three cuts mentioned at the March meeting statement. 

The statement included the phrase: “The Committee remains very vigilant to inflation risks”, which shows continued concerns about the path of inflation. 

It’s worth noting that mainline US inflation has slowed down to 3.3% in May from a peak of 9.9% in 2022. 

The Energy Information Administration reported an increase of 3.7 million barrels last week to 459.7 million barrels, while analysts expected a drop of 1.2 million barrels. 

Gasoline stocks rose 2.6 million barrels to 233.5 million barrels, while distillate stocks rose by 0.9 million barrels to 123.4 million barrels. 

US stock indices rose on Wednesday, with both the NASDAQ and S&P 500 hitting fresh record highs following US inflation data. 

Official data today showed US consumer prices rose 3.3% y/y in May, down from 3.4% in April, while core inflation rose 3.4%, slowing down from 3.6%. 

The Federal Reserve is also expected to announce its policy decisions later today, widely expected to maintain interest rates unchanged.

However, the Fed is expected to signal the approach of the upcoming policy easing cycle soon. 

On trading, Dow Jones rose 0.2%, or 92 points as of 17:13 GMT to 38,839, while S&P 500 rose 1.1%, or 60 points to 5435, as NASDAQ added 1.8%, or 307 points to 17,648. 

Bitcoin rose on Wednesday for the first time in three days away from four-week lows amid active purchasing efforts.

The recovery is underpinned by slower US 10-year treasury yields as markets await important US monetary policy decisions and statements by the Fed today.

Prices 

Bitcoin rose $721 at Bitstamp, or 1.1% to $68,027, with a session-low at $66,911. 

Prices lost 3.2% on Tuesday, the second loss in a row, marking a four-week low at $66,011 on risk aversion.

Crypto Market Value

Crypto market value rose by over $30 billion on Wednesday to a total of $2.595 trillion as both ethereum and bitcoin lost ground.

US Yields 

US 10-year treasury yields fell 0.4% on Wednesday away from a week high at  4.479%, underpinning risk appetite in the market. 

Markets await a host of important data and policy decisions in the US today, which will contribute to market trends. 

Crucial Day in the US 

First, US May inflation data will be released, followed by the Fed’s policy decision. 

US inflation data will have an important effect on the Fed’s views towards policy easing and rate cuts in the months to come. 

According to the Fedwatch tool, the odds of a September 0.25% Fed rate cut stand at 52%, and the odds of such a cut in November stand at 67%. 

While the Fed is expected to maintain interest rates unchanged at below 5.5%, it will issue important forecasts for interest rates and inflation this week. 

The Fed is widely expected to reduce the number of expected rate cuts this year from three to two.