FTSE 100 down 0.08%; DAX down 0.41%; CAC 40 down 0.23% (Il Sole 24 Ore Radiocor) - Milan, 13 Jun - European shares opened moderately lower in cautious trade, retreating from yesterday's gains, as investors digested the Federal Reserve's latest monetary policy decision and US inflation data. The Stoxx 600 index was down 0.29% in early trade.

The US central bank yesterday held the federal funds rate at 5.25% to 5.50% but slashed its outlook for interest rate cuts, warning that it expects only one rate cut this year, down from previous forecasts of three.

However, the so-called 'dot plot' - a chart updated on a quarterly basis giving each Fed member's prediction on the trajectory of the federal funds rate - indicated a more aggressive cutting path for 2025, with four rate cuts totaling a full percentage point, up from three.

A cooler-than-expected US consumer price inflation reading helped support sentiment.

The US Consumer Price Index for May came in unchanged from the previous month and rose 3.3% on the year, both slower than expected. Core inflation, stripping out volatile food and energy, followed suite growing 0.2% on the month and 3.4% on the year, below forecasts of 0.3% and 3.5% respectively.

Last week, the European Central Bank cut rates by 25 basis points for the first time since 2019 as widely expected by the markets, but did not commit to a particular path in the coming meetings. Despite a hike in inflation forecasts, investors still believe the ECB is likely to cut interest rates in September.

In European stock market dealings most sectors were lower, with travel and auto stocks leading the losses.

At 0740 GMT, the London FTSE 100 was down 0.08% at 8,209 points, the Frankfurt DAX was down 0.41% at 18,568 points, the Paris CAC 40 down 0.23% at 7,846 points, while in Milan the FTSE MIB fell 0.30% at 34,255 points, and in Madrid the IBEX 35 was down 0.03% at 11,241 points.

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(RADIOCOR) 13-06-24 10:02:45 (0197) 5 NNNN