What Wall Street is saying about May’s shocking inflation report

Reuters

Soaring inflation fuels bets on sharper Fed rate hikes

(Reuters) -Stubbornly hot U.S. inflation is fueling bets that the Federal Reserve will get more aggressive about trying to cool price pressures and even potentially ditch its own forward guidance by delivering a jumbo-sized interest rate hike in coming months. Fed policymakers had already all but promised half-point interest rate hikes at their meeting next week and again in late July, following May’s half-point hike and the start of balance sheet reductions this month. On Friday, traders of futures tied to the Fed policy rate began pricing in an even bolder path after U.S. Labor Department data showed sharply higher food and record gas prices pushed the consumer price index (CPI) up 8.6% last month from a year earlier.