The Federal Reserve’s campaign to tame inflation is making steady progress. US data from May showed a deceleration in price rises. The closely-watched Consumer Price Index rose 4% in May compared with a year ago, down from April’s 4.9% increase — the smallest monthly increase in more than two years, according to the US Bureau of Labor Statistics. Last June, inflation peaked at 9.1%. To be sure, it doesn’t mean the Fed is done with further rate rises — underlying price pressures remain. But the latest CPI set the markets abuzz with positive speculation as inflation moves closer to the Fed's 2.0% target. “It is our belief that inflation has been beaten,” says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. BOVE offers evidence that US inflation could drop more sharply as the money supply contracts and consumers run through excess cash. Housing was one of the standouts in the latest CPI, up 8.0% year-over-year. “It’s a lagging indicator,” says MAT VAN ALSTYNE, ODEON co-founder and managing partner, noting how the latest CPI would likely have come in lower if housing was a more concurrent indicator. (On Wednesday, June 14, the Fed kept interest rates unchanged at a range of 5.00% to 5.25%. In a surprise to many watchers, however, the Central Banker issued projections of two additional quarter point rate hikes in 2023.)

Meanwhile, the pattern is repeating itself with inflation coming down across the globe. Still, there are notable and glaring exceptions from an eye-watering 155.8 % in Venezuela to 108.8% in Argentina. And there are no guarantees inflation has been finally throttled. A proposed currency board for Argentina, with the US greenback tied to the peso, would help stabilize the Argentine economy, says VAN ALSTYNE. Elsewhere, BOVE brings listeners up to date on the banking crisis and on the latest challenges. US banks are losing market share to rival lenders who face less regulation, and seemingly less stringent oversight. At the same time, US banks are not seeing enough deposit in-flows to maintain optimum levels of lending. Joining the CONVERSATION is JOHN AIDAN BYRNE who shares his thoughts on the plight of the American middle class, as we look more closely at the reality of the American Dream. Is it still alive and well?

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