In a world where a cup of joe might soon require a mortgage application, inflation finally decided to ease up this past May. According to reports, consumer prices rose by a modest 3.3% year-over-year, surprising many who were bracing for a bit more economic heartburn (CNN, June 12, 2023).

The ever-cautious economists had braced themselves for a slightly gloomier 3.4% increase, according to predictions by CBS News (June 12, 2023). It’s a rare occasion where being cautious paid off—in a good way.

On a brighter note, the monthly consumer prices decided to flatline in May, in stark contrast to April’s 0.3% increase (CNN, June 12, 2023). Perhaps it was sheer economic fatigue, or maybe just a collective decision to stop panic-buying toilet paper and avocados. Inflation, like all of us, needs a break every now and then.

Meanwhile, the Federal Reserve has everyone on the edge of their seats as it gears up to announce its latest interest rate decision today. According to the New York Post (June 12, 2023), it’s widely anticipated that the Fed will keep its benchmark rate unchanged at roughly 5.3%. It’s almost as if they’re tempted to hit the snooze button, savoring this rare moment of calm like a procrastinated alarm on a Monday morning.

Core inflation, the part of the metric that conveniently excludes food and energy prices (as if we don't need those), rose by a meager 0.2%. According to the New York Post (June 12, 2023), this too was slightly lower than what forecasters had predicted. Even core inflation seems to be getting into the lazy summer vibe.

Of course, Wall Street, ever the early riser, was quick to react. Dow futures jumped ahead of the market opening on the news of the lower inflation data (New York Post, June 12, 2023). It's almost as if the entire financial world let out a collective sigh of relief, able to sip on its morning coffee without the usual pang of existential dread.

Interestingly, this pause in inflationary pressure sets the stage for the Federal Reserve, which is known for its meticulous pondering over interest rates. According to CNN (June 12, 2023), they are expected to announce today whether they will maintain the current interest rate of approximately 5.3%. Based on recent data, it appears likely they will choose to let the sleeping rate lie.

While inflation taking a coffee break is a refreshing change, it’s crucial to remember that this momentary reprieve may not last forever. The Federal Reserve might savor the calm, but vigilance remains the order of the day. After all, even the most tranquil coffee break must eventually come to an end.

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