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U.S. equity futures nudged higher Wednesday, while Treasury yields held steady, as investors braced for a key May inflation report just hours ahead of the Federal Reserve's June rate decision.
Markets aren't expecting any change in the Fed's benchmark lending rate, which sits at a two-decade high of 5.25% to 5.5%, when the central bank unveils its official statement at 2:00 pm Eastern time, but are focused instead on the new set of growth and inflation projections published by Fed officials each quarter.
The forecasts feed into the so-called Dot Plots, which are a summary of where officials see Fed rates over the coming year and beyond. The last set of Dots, published in March, pointed to three quarter point rate cuts this year.
A series of faster-than-expected inflation reports since then, alongside a robust labor market and an outperforming economy, will likely trigger an overhaul of those forecasts, with today's May CPI update having a heavy influence on the Fed's thinking.