5 things to start your day

[Bloomberg]( It’s Fed day, China tries to control commodity prices, and inflation worries remain. Guidance The Federal Reserve’s Open Market Committee is all but certain to [hold interest rates unchanged]( and announce no changes to its asset purchases when the decision is announced at 2:00 p.m. Eastern Time today. That decision will be accompanied by new economic projections, with the “dot plot” expected by some to [signal a 2023 rate hike](. Fed Chair Jerome Powell may emphasize the [unevenness of the recovery]( in his press conference at 2:30 p.m. Investors are likely to be more interested in any comments on the possible start of conversations at the bank [about tapering asset purchases](. Control China has ordered state-owned enterprises to [limit their exposure to overseas commodities markets]( as the country steps up its [campaign to rein in speculation](. Authorities also announced they will soon release zinc, copper and aluminum from the secretive national stockpile. It is the first release of reserves in years, with the announcement causing a drop in metal prices in London and Shanghai, and a selloff in mining shares in Australia. China’s move comes as many parts of the commodity market that had surged recently are [already starting to cool](. Inflation  Consumer prices in the [U.K. rose 2.1%]( from a year earlier in May, the highest since July 2019. The faster-than-forecast pace increased speculation about the timing of Bank of England tightening. Following the high U.S. reading last week, there remains speculation on [how transitory any inflation event will be](. One of the main drivers of the headline number is energy prices, and with [oil trading above $72 a barrel]( this morning, there seems to be little chance of relief on that front. Markets quiet Global equities are relatively calm as investors wait for today’s Fed decision and press conference. Overnight the MSCI Asia Pacific Index slipped 0.3% while Japan’s Topix index closed little changed. In Europe the Stoxx 600 Index was 0.1% higher at 5:50 a.m. with miners and banks among the biggest losers. S&P 500 futures [pointed to a quiet open](, the 10-year Treasury yield was at 1.489% and [gold was flat](. Coming up... U.S. May housing starts and import and export prices are at 8:30 a.m. Canadian CPI for the month is also at that time. Oil inventory data is at 10:30 a.m. The Fed decision is at 2:00 p.m., with Brazil’s central bank expected to [hike rates again]( at 5:30 p.m. President Joe Biden [meets Russia’s Vladimir Putin in Geneva](. A bipartisan group of senators is expected to release the [text of their infrastructure plan](. What we've been reading Here's what caught our eye over the last 24 hours. - The difference between a [digital dollar and a CBDC](. - $100 billion of stablecoins is starting to [make policymakers nervous](. - There’s a [big divergence developing]( in inflation expectations. - Airbnb is spending millions of dollars to [make nightmares go away](. - Europe’s biggest debt collector sees [rise in late payments](. - Startups race Microsoft to find ways to [cool data centers](. - [Strange blinking star]( near heart of Milky Way catches scientists’ eyes. And finally, here’s what Joe’s interested in this morning The Fed is going to get most of the attention today, but it's not the only big monetary authority that's going to make news. Also up today is the Central Bank of Brazil, which is expected to do a 75 basis point hike, bringing its main policy rate above 4%. As in other countries, Brazil slashed rates during the crisis. But unlike in many other places, it's already begun an aggressive rate hike campaign in order to fight inflation. The problem is these rate hikes haven't accomplished much. [There's a great piece you should read from my Bloomberg colleague Maria Eloisa Capurro]( about how despite the hawkish stance of BCB chief Roberto Campos Neto, inflation and inflation expectations in the country continue to rise unabated. The problem is that some of the main drivers of inflation are simply beyond the obvious control of the central bank: commodity prices are soaring around the world, and there's been a nearly once-in-a-century drought that's driving up electricity prices. (As much as 70% of Brazil’s energy mix depends on [hydroelectricity](.) But all this just then gets back to a general debate, which applies to Brazil, the U.S., and basically everywhere else: Is turning dials up at the central bank a powerful macro stability tool? In the U.S. we have high inflation readings (at least compared to recent history) but there's a good argument to be made that they're driven by idiosyncratic factors, like the semiconductor shortage and the reopening period. As for the global commodities boom, a huge factor there has been aggressive buying of all types of goods from China ([though that buying may be starting to wane](). There is one obvious way that any central bank can tame inflation: Hike rates so high that you induce a depression, demand plunges and the price of everything collapses. But aside from that, yes, you can sum up a bunch of disparate categories and put them in an index called "CPI" or "PCE". But underlying all this is a bunch of unique events (a drought, Chinese commodity stockpiling, a semiconductor shortage, etc.) that are not well addressed with a blunt tool like interest rates. Joe Weisenthal is an editor at Bloomberg Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022