The Federal Reserve has decided to keep its benchmark interest rate within the range of 5.25% to 5.5%, while the focus of the markets shifted towards the Fed’s updated plan for rate reductions. Instead of the three cuts that were predicted in March, the Fed is now anticipating only one cut, which is likely to happen in December. On June 6th, the European Central Bank made its first interest rate cut in five years by lowering the deposit facility rate by a quarter of a percentage point to 3.75%.
In May, the labor market continued to outperform expectations as it added 272,000 jobs. This surpassed analysts’ predictions and marked the second-largest monthly increase in payrolls this year. Additionally, the annual inflation rate dropped to 3.3%, providing some relief for consumers and businesses alike.