Ahead of the highly anticipated Federal Reserve decision on interest rate cuts this Wednesday, investors are fixated on the upcoming release of the May CPI report. Harvard Kennedy School of Government professor Jason Furman joins Catalysts to offer his perspectives on the data and rate cut expectations.

Furman believes the Fed is "locked for no move this month," as the decision and CPI data are scheduled for release on the same day, leaving them unable to respond. He acknowledges that regardless of the CPI data's outcome, the issue is that while some months yield favorable inflation prints of 2%, "the bad months it's way above 2%, that means it's averaging out to a decent amount above 2%." However, Furman anticipates that a rate cut could potentially materialize in December.

"Some of this inflation is probably embedded in expectations," Furman tells Yahoo Finance. "High wage growth leads to high price growth, which in turn leads to high wage growth, and it's a staggered process. So in the best case, it's gonna take a while for it to asymptote itself back down toward two [percent]."

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This post was written by Angel Smith