Good morning!

A couple of important inflation reports and a policy meeting from the Fed highlight this week's market and economic outlook. Here's what's happening...

• Two big inflation reports hit this week: the CPI (Consumer Price Index) arrives Wednesday, while the PPI (Producer Price Index) follows on Thursday. The CPI report for May is expected to show prices rising at a 3.4% annualized rate, unchanged from April, with core CPI down a little at 3.5%. Thursday's PPI report, which measures prices for goods produced, is expected to show an increase of 2.2% from May. *

• The Federal Reserve meets Wednesday, and practically no one is expecting the current 5.5% interest rate to change. What investors are looking forward to is the Fed's Summary of Economic Projections (SEP), including its "dot plan", which maps out policymakers' expectations for the direction of future interest rates. In March, the dot plot revealed a consensus among Fed officials for 3 cuts. Now that projection is in question following a succession of sticky inflation readings, cautious commentary from Fed officials, and a robust U.S. labor market. Most investors now expect just one rate cut for 2024. **

• Apple finally revealed its AI roadmap, playing catch up to Microsoft, Google, and chipmakers Qualcomm and NIVIDIA. During Monday's Worldwide Developer Conference, the company announced "Apple Intelligence", software that will retrieve information across all apps on its phones, tablets and computers, as well as scan personal information to help users proofread text, correct photos, and gauge traffic patterns ahead of an atypical commute. An updated Siri will also be able to better understand natural language, process contextual information and take action inside apps. For certain complex Siri requests, Apple will prompt users for permission to connect with ChatGPT for better answers. Impatient investors hoped Monday’s announcements would propel a new rally, but apparently they didn't like what they heard: the company’s shares fell by about 2% during intraday trading following the announcements. ***

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