U.S. CPI wipes out expectations of interest rate cut before June, gold and U.S. bonds plunge in response

On Tuesday (February 13), the latest data released showed that the U.S. core CPI recorded a monthly rate of 0.4% in January, the largest increase since May last year, almost extinguishing market expectations for the Federal Reserve to cut interest rates in May. The swaps market is now fully pricing in a postponement of the Fed rate cut from June to July.

The seasonally adjusted monthly CPI rate in the United States was 0.3% in January, and the annual rate was 3.1%; the core CPI annual rate in the United States in January was 3.9%, and the core CPI monthly rate in January was 0.4%, the largest increase since May last year.

After the data was released, swap markets fully priced in the Fed's interest rate cut being postponed from June to July, with a rate cut of less than 100 basis points in 2024.

Spot gold's decline expanded to 1%, approaching the $2,000/ounce mark. The U.S. dollar index hit a three-month high, last trading at 104.84, up 0.7% on the day.