After the April inflation data was released, Federal Reserve policymakers remained cautious

As investors reassess the outlook for interest rates following the release of consumer price index data in April, a number of Federal Reserve policymakers plan to speak this week.

According to the CME Fed Watch Tool, the probability that the Federal Reserve will leave its policy rate unchanged in September is around 35%.

Federal Reserve officials who will speak on Tuesday include Richmond Federal Reserve Bank President Barkin, New York Federal Reserve Bank President Williams, Boston Federal Reserve Bank President Collins and Cleveland Federal Reserve Bank President Mester.

Atlanta Fed President Raphael Bostic said early Tuesday that the Fed must be cautious about cutting interest rates for the first time, adding that a delay may be needed to avoid spurring pent-up enthusiasm for investment and other spending. At the same time, Fed Governor Christopher Waller pointed out that he needs to see several more months of good inflation data before he can safely support easing policy.

After stronger-than-expected inflation data in Quarter 1 this year, the Federal Reserve has taken a cautious approach to the timing of its policy pivot. Data released by the Bureau of Labor Statistics on May 15 showed that the core consumer price index (CPI) in the United States rose 3.6% year-on-year in April. The data was in line with the 3.8% increase in March and was in line with market expectations. On a monthly basis, both CPI and core CPI rose 0.3% after rising 0.4% in March. The dollar came under bearish pressure as market participants assessed the inflation data, and the dollar index fell to its lowest level in more than a month, falling more than 0.7% per week.

Mary Daly, president of the San Francisco Federal Reserve, said Monday that while she expects housing inflation to improve slowly, she doesn't expect it to move quickly. Daly also pointed out that she is not confident that inflation can continue to fall to the Fed's 2% inflation target.

According to reports, Michael Barr, the vice-chairperson of the Federal Reserve for supervision, said that the Federal Reserve is in a good position to maintain policy stability and observe the economy. Meanwhile, Jefferson, the vice-chairperson of the Federal Reserve's Governing Council, admitted that the improvement in inflation data in April was encouraging, adding that it was too early to tell whether the recent slowdown in the anti-inflation process would continue.

Last week, Federal Reserve Governor Michelle Bowman said progress on inflation may not be as sustained as many had hoped, and Mester, president of the Cleveland Fed, stressed that maintaining the Fed's current level of policy would help return inflation, which remains stubbornly high, to its 2 percent target.

Richmond Federal Reserve President Barkin said last Thursday that the latest consumer price index (CPI) data shows that inflation is not reaching the level the Federal Reserve wants to reach.

Finally, New York Federal Reserve Bank President William Williams believes that there is no need to cut interest rates in the short term.