June 30 (Reuters) – The Federal Reserve is perceived to be slightly less committed to a July interest rate hike, according to traders’ speculation on Friday, following a government report that showed a slight easing of price pressures in May, although they still remained well above the Fed’s target. The data released on Friday revealed that inflation, as measured by the Fed’s preferred personal consumption expenditures index, increased by 3.8% on a year-on-year basis last month, which was a decrease from April’s pace of 4.4%. Additionally, underlying core inflation rose by 4.6%, slightly lower than the economists’ expected rate of 4.7%. Prior to the release of this data, futures tied to the Fed’s policy rate had priced in an almost 90% probability of a July rate increase, but they now indicate an approximately 85% probability.
Reporting by Ann Saphir; Editing by Susan Fenton
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