Investors this week shifted their focus to the June Fed meeting after the release of the latest US CPI data, worried about whether policy makers would take more aggressive measures to deal with inflationary pressures.

Specifically, the Fed's latest policy meeting will be held from June 14 to 15, eastern time, and the Fed is expected to announce at least another 50 basis point increase in its benchmark interest rate. After the policy announcement, Federal Reserve Chairman Jerome Powell will hold a press conference. The Fed will also release a summary of its latest economic forecasts, providing officials with forecasts for GDP growth, inflation and future interest rate hikes.

"I think what really matters is what Powell said at the meeting and whether he gave clear guidance on the economic trend in September," said Michael Schumacher, head of macro strategy at Wells Fargo & Co. He will do this only if he is hawkish, and if he does not, people will think of him as a dove. "

Carl Vasina of Royal Bank of Canada said she was waiting for Powell's comments and did not expect any surprises at the meeting. She said she was encouraged that some Fed officials seemed ready to raise interest rates faster earlier this year and give themselves more flexibility in the future.

"I think the market likes this, which shows that the Fed is not on autopilot and reflects that they do not want to do too much damage to the economy," she said. I would like to hear more comments about this flexibility. "

Economists at JPMorgan Chase & Co point out that Powell has said he wants to guide expectations rather than surprise them. The Fed will raise interest rates by 50 basis points in June because of low expectations of an upward rate hike.

The Bureau of Labor Statistics's consumer price index (CPI) unexpectedly rose 8.6 per cent in May, raising concerns on Wall Street that inflation has become more entrenched in the US economy, which could prompt Fed officials to take tougher action to slow soaring costs. Barclays and Jefferies both revised their forecasts on Friday to include a 75 basis point rate hike in June, although other economists still expect a 50 basis point hike.

Economists at Goldman Sachs revised their forecasts on Friday to raise interest rates by another 50 basis points in September, based on expectations that the Fed would raise interest rates by 50 basis points in June and July respectively.

Economists JPMorgan Chase & Co expect Fed officials to provide new interest rate forecasts that reflect the accelerated pace of policy tightening, but they still expect to raise interest rates by 50 basis points this week. They expect the Fed's median forecast for interest rates to show that the federal funds rate will be 2.625% at the end of the year, up from 1.875% forecast in March.

Meanwhile, Jan Hatzius, chief economist of Goldman Sachs Group, said in a new report on Friday: "weak hiring expectations at the company level in the second half of the year and slowing GDP growth indicate that job growth will slow in the coming months. News of the recent hiring freeze and more selective hiring suggests that companies expect wage growth to slow, and recent business activity surveys confirm these signals. "

On the bond market, the yield curve also flattened after Friday's inflation report, meaning shorter-term yields, such as 2-year Treasuries, will rise to closer to longer-term yields, such as 10-year Treasuries.

MikeLoewengart, managing director of investment strategy at E-Trade, said: "the higher-than-expected CPI data worried investors. Consumers may experience high prices in their daily life, especially when refueling. Disappointingly, despite the Fed's efforts, we have not yet controlled inflation. "