The U.S. Bureau of Labor Statistics will release the U.S. CPI data for June at 20:30 Beijing time tonight (July 11, 2024). According to the current data summary, institutions predict that the data for June is expected to continue the downward trend. Energy prices will become an important driving force. In June, U.S. gasoline prices fell by nearly 2% month-on-month. Last month, the overall CPI is expected to increase by 3.1% year-on-year, and the growth rate fell by 0.2 percentage points, hitting a three-and-a-half-year low. Food prices have been stable and falling. Faced with pressure on the consumer side, some major retailers recently announced price cuts. Compared with the current peak of 13.5% in the summer of 2022, the year-on-year increase in June may fall back to 1.0%. The core CPI may increase by 3.4% year-on-year, the same as in May, and will rise by 0.2% month-on-month.
Federal Reserve Chairman Powell said in Congress this week that the latest inflation data showed some modest further progress, and more good data will strengthen the Fed's confidence that inflation is moving sustainably towards 2%. These views have been frequently mentioned in recent Federal Reserve meeting minutes and official speeches. Although the Fed's dot plot points to only one rate cut, interest rate futures pricing shows that the balance is tipping towards two rate cuts this year as the economy slows and the supply and demand of jobs rebalance.
Boris Schlossberg, macro strategist at BKasset management, said that from the Fed's perspective, this will be another mild inflation mark, and the decline in motor fuel prices and the relatively mild increase in food prices will curb the rise in the overall CPI. The Fed will pay more and more attention to the downside risks of the labor market in the future, because history has repeatedly shown that unemployment does not always proceed in an orderly manner.
Keith Lerner, co-chief investment officer of Truist Advisory Services, said that his overall view of the economy is that the economy is cooling, but not weak. An unemployment rate above 4% will attract the attention of the Fed and may provide them with the flexibility to possibly start cutting interest rates, which he believes is likely to be in September.
As it stands, the US June CPI data will definitely have a certain impact on the market. Judging from the signs captured so far, the high probability data is in line with expectations, which will further enhance the market's expectations for the Fed's rate cuts, thereby indirectly driving the crypto market further up.
