The US inflation, as measured by the Consumer Price Index (CPI), declined to 3.3% in May from 3.4% in April, becoming a trending topic among influencers on the social media platform “X.” This lower-than-expected inflation reading has sparked significant debate regarding its implications for future US monetary policy. Many consider it a key indicator that could influence the Federal Reserve’s decisions on interest rates, reveals the Social Media Analytics Platform of GlobalData, a leading data and analytics company.
Shreyasee Majumder, Social Media Analyst at GlobalData, comments: “Influencers’ perspectives on the recent Federal Reserve announcements and economic projections illustrate a range of viewpoints and considerations. While some advocate for prompt interest rate cuts, citing optimistic inflation data that suggests a potential return to targeted levels, others emphasize the Fed’s cautious approach and commitment to data-driven decision-making.
“This deliberative stance reflects concerns over the volatility of short-term economic indicators and the importance of sustained trends in inflation moderation before endorsing significant policy adjustments. The divergence in opinions underscores the intricate balance the Fed navigates in its mandate to foster economic stability while managing inflation expectations amidst evolving global economic dynamics.”
Below are a few popular influencer opinions captured by GlobalData’s Social Media Analytics Platform:
- Mark Zandi, Chief Economist at MoodysAnalytics ECON:
“Great inflation report! While this morning’s consumer price inflation report for May probably overstates the disinflation case, it makes a strong case that inflation is headed back to the Fed’s inflation target. All the trend lines look good. It is time for the Fed to cut rates.”
- Andreas Steno Larsen, Founder and CEO of Steno Research:
“BREAKING: Raising the inflation forecast and rates In the projections the Fed raise the PCE forecast for 2024 by 20 bps and only ONE cut this year That is smack-dab equal to what we had in our predictions. They move a cut into 2025, which helps the market stomach this..”
“The Fed leaves interest rates unchanged and predicts that it will cut borrowing costs just once before the end of 2024, a sign that it plans to be patient before turning a corner in the fight against rapid inflation.”
“FOMC projections are not promises. Today’s projection of one rate cut leans hawkish, but if inflation (particularly PCE) continues to show cooling, the Fed will revise. The Fed doesn’t want to cut prematurely, but they also don’t want to be behind the curve. They remain data dependent, and want to ensure the economy is on a sustainable path for 2% inflation.”
“Bottom line. Inflation improved in May, but one month does not a trend make. The Fed needs to seen continued stray improvements to cut in September, which is more possible today than yesterday. The results should remove the risk of a participant at today’s Fed meeting penciling in hike in rates. The Fed is expected to pencil in between two and one rate cut when it releases it summary of economic projections along with the statement to hold rates unchanged today.”
“On the surface, the #FederalReserve’s SEP has been subjected to a hawkish tilt as reflected in The higher #inflation forecasts for 2024 and 2025; The move of the median cuts for 2024 from 3 to 1; 4, up from 1 FOMC member, expecting no cuts this year; and The slight move up in the neutral rate. I strongly suspect that the #markets’ relaxed approach to this reflects the view that the SEP does not fully reflect this morning’s inflation data. All of which makes the press conference, which is about to start, more interesting.”
