Euro Zone Inflation Surges to 2.6% in May, Prompting Rate Cut Expectations from amy rose fight part 2 cm3 Watch Video

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Eurozone inflation increased to 2.6% in May 2024 from 2.4% in April, as both headline and core inflation came in higher than economists expected. Services inflation, an important metric for the ECB, rose to 4.1%. Markets continued to fully price in an interest rate cut by the ECB at its June meeting, following signals from policymakers that a cut is likely. Inflation has cooled significantly from a peak of 10.6% in October 2022 but has remained below 3% for the past eight months. The euro was slightly higher against the dollar and pound after the inflation release.

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Eurozone inflation increased to 2.6% in May 2024 from 2.4% in April, as both headline and core inflation came in higher than economists expected. Services inflation, an important metric for the ECB, rose to 4.1%. Markets continued to fully price in an interest rate cut by the ECB at its June meeting, following signals from policymakers that a cut is likely. Inflation has cooled significantly from a peak of 10.6% in October 2022 but has remained below 3% for the past eight months. The euro was slightly higher against the dollar and pound after the inflation release.
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Consumer confidence rose in May after declining for the last three months, with the Conference Board's Consumer Confidence Index increasing to 102 from 97.5. Consumers cited high prices for food and groceries as having the greatest impact on their views of the economy. Their expectations about average inflation over the next 12 months edged up slightly. The share of consumers expecting higher interest rates over the next year also increased slightly. Views of the current labor market improved as fewer consumers said jobs were hard to get.
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