Analysis of the latest news from the Federal Reserve: The U.S. CPI in June cooled more than expected, is the interest rate cut storm coming?
The probability of the Federal Reserve cutting interest rates this year has soared to 99%, and the global financial market has set off a huge wave!
U.S. inflation data
June CPI data:
Year-on-year data: up 3% year-on-year, lower than the market expectation of 3.1%, the lowest level since June last year.
Month-on-month data: down 0.1% month-on-month, significantly lower than the market expectation of 0.1%, the first decline since May 2020.
Core CPI: The core CPI excluding food and energy rose 3.3% year-on-year, lower than the market expectation of 3.4%, a new low in nearly three years; up 0.1% month-on-month, both the expected and previous values were up 0.2%, the smallest increase since August 2021.
Market impact
This set of data has strengthened the Fed's motivation to cut interest rates this year. The market expects the probability of a rate cut in September to soar to 92.7%, and the probability of at least one rate cut this year has risen to 99%.
The expectation of rate cuts boosted dollar-denominated assets such as Hong Kong stocks, US bonds, gold, etc.
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