Though some  2/5  BIS - Central bankers' speeches  measures of wage increases have begun to slow, I am concerned that inflation won't be coming down very much unless average hourly earnings decelerate from the most recent level of 4.4 percent to a pace a lot closer to 3 percent.4 On Friday, we will be getting April inflation data based on personal consumption expenditures and then May CPI data on the first day of the FOMC meeting.
These are two critical pieces of data I will be looking at between now and the June FOMC meeting to learn more about inflation dynamics and if we are seeing some easing in inflation pressures. Uncertainty about Credit Conditions Turning to banking conditions, I want to emphasize that overall, the banking system is sound and resilient, with strong capital and liquidity.