JPMorgan says May CPI may be near peak of inflation cycle

JPMorgan Chase has analyzed that the U.S. May Consumer Price Index (CPI) may be approaching the peak of the current inflation cycle. David Kelly, Chief Global Strategist at JPMorgan Asset Management, stated the Fed is likely to hold interest rates at its next meeting to monitor incoming data. However, the market still appears to be pricing in the possibility of a rate hike within the year. In the interest rate derivatives market, the probability of a rate hike before the end of the year has increased, with some SOFR options betting on the possibility of earlier-than-expected tightening. JPMorgan noted the market is currently torn between expectations of an inflation peak and the prospect of hawkish monetary policy, with the future direction dependent on energy prices and core CPI trends.