Inflation Cooled, but the Fed Expects Just One Rate Cut This Year

Consumer price increases slowed notably in May, according to data released today, suggesting that inflation is easing again after proving stubborn earlier this year. Gasoline prices fell, car insurance prices dropped and so-called core inflation, which strips out volatile food and fuel prices, eased to 3.4 percent, its lowest level since April 2021.

The new data was a good sign for consumers, whose summer vacations will be more affordable, and the Federal Reserve, which has been looking for evidence that inflation is cooling.

Hours after the inflation data was released, Fed officials announced that they were again leaving interest rates unchanged from their more than two-decade high of 5.3 percent. That much was widely expected. However, the Fed surprised some economists by predicting that it will cut rates just once before the end of the year, down from its previous forecast of three reductions.

Fed officials gave no clear hint as to when rate cuts will start. But Jerome Powell, the Fed chair, said during a news conference that the policymakers were still looking for “greater confidence” that inflation was moving sustainably to 2 percent before they make a change.

Our economics reporter Jeanna Smialek explained that “the Fed is in no rush to cut rates, because the job market is holding up.” Powell suggested that policymakers were ready to do so if either the labor market weakens unexpectedly or inflation falls more quickly.

Southern Baptists voted to oppose I.V.F.

Southern Baptist delegates, representing almost 13 million church members across the U.S., voted today to reject the use of in vitro fertilization. The result suggests that evangelicals are increasingly open to arguments that equate embryos with human life.

Earlier today, delegates also blocked a tighter ban on congregations with women in leadership positions. The denomination has long forbidden female pastors, but the ban would have added the principle to its constitution. The failure was an unexpected rebuke to a hard-right faction that has been jockeying for influence inside the organization.

The U.S. eyes Russian assets for Ukraine

President Biden arrived today in Italy, where he is set to meet this week with the other leaders of the Group of 7, the club of the world’s wealthiest democracies. While there, he will be largely focused on finding ways to aid Ukraine and further isolate Russia.

Before he arrived, the Treasury Department announced a series of new sanctions aimed at stopping China from helping Russia sustain its war effort against Ukraine.

Biden and his allies appear poised to agree to use the interest from Russia’s frozen financial assets to aid the reconstruction of Ukraine. He will also seek to convince G7 leaders that the U.S. will remain committed to backing Ukraine no matter what happens in this year’s presidential election.

Tensions are rising on Israel’s northern border

The Lebanese militant group Hezbollah fired one of its heaviest rocket barrages yet into Israel today, in response to an overnight Israeli strike that killed one of Hezbollah’s senior commanders.

The intensity of Hezbollah’s attacks has increased in recent weeks, raising concerns that the low-level conflict could grow into a larger war on Israel’s northern border.

In related news, a recently freed Israeli hostage was subject to psychological warfare during his captivity in Gaza, his family said in an interview.

In ‘Inside Out 2,’ Pixar wrestles with puberty

It has been almost a decade since Pixar released “Inside Out” and introduced us to 11-year-old Riley and the control room in her mind, where animated emotions push her literal buttons. “Inside Out 2,” in theaters this week, picks up soon after the first movie. This time, puberty is on the scene with a whole new cast, including Envy and Embarrassment. Nostalgia shows up, too, as a little old lady in rose-tinted glasses.

Our critic Manohla Dargis writes that the film works largely because the first one did. Some ideas in “Inside Out 2” even manage to slip past the safety of its nice worldview with shocks of the sublime.

The miniature secrets of championship rings

For decades, the rings handed out by title-winning sports teams have become more and more extravagant. But one jeweler, Jason Arasheben, has established himself as the go-to designer of championship rings by pushing the boundaries of what a ring can be.

His designs often include hidden features like reversible faces and detachable compartments. Take a look.

At this restaurant, youth is forbidden

Bliss Caribbean Restaurant in St. Louis County, Mo., has become popular not just for its fried red snapper and late-night dance parties, but also because of the people it turns away. The restaurant only allows in women who are 30 or older and men who are at least 35.

Legal experts say the age rule may violate the law, but many of the customers say they appreciate the lack of 20-somethings. “It stops all of the riffraff that goes on in St. Louis,” one diner said.

Have a discerning evening.

Thanks for reading. I’ll be back tomorrow. — Matthew

Phil Pacheco was our photo editor today.

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