Fed has breathing room as US inflation continues to ease: US inflation slowed to its lowest level in two years on the back of the Federal Reserve’s aggressive interest rate hikes, giving the central bank more room to pause the tightening cycle. The consumer price index fell to 4.9% last month, its lowest level since April 2021, from 5% in March, according to Bureau of Labor Statistics figures (pdf) released yesterday. Core inflation, which has been stickier in recent months, also eased slightly during the month.

An end of the Fed’s tightening cycle? Fed Chairman Jerome Powell has already hinted that the Fed will cool it with the back-to-back rate hikes after the destabilizing impact of sharply higher rates was brought into view in March with a liquidity crisis among regional lenders. The central bank has over the past year raised the fed funds rate to its highest level since 2007 in efforts to tame soaring inflation and bring it back down to its 2% target.

EGX30

17,495

+1.0% (YTD: +19.8%)

USD (CBE)

Buy 30.84

Sell 30.96

USD at CIB

Buy 30.85

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Interest rates CBE

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THE CLOSING BELL-

The EGX30 rose 1.0% at yesterday’s close on turnover of EGP 2.83 bn (56% above the trailing 90-day average). Regional investors were net buyers. The index is up 19.8% YTD.

In the green: Taleem (+11.4%), Ibnsina Pharma (+7.5%) and Cleopatra Hospitals (+4.2%).

In the red: Mopco (-6.0%), ADIB (-1.2%) and Juhayna (-0.7%).

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