The data released by the United States last night showed that:

The annual rate of CPI in May was 3.3%, lower than the expected value of 3.40% and lower than the previous value of 3.40%.

The annual rate of core CPI in May was 3.4%, lower than the expected value of 3.50% and lower than the previous value of 3.60%.

Both the overall CPI and the core CPI were lower than expected. This is a comprehensive weak data. After the release, the US interest rate swap market fully priced in two 25 basis point interest rate cuts by the Federal Reserve in 2024. It is expected that the probability of a 25 basis point interest rate cut in November will reach 100%, and the probability of a rate cut in September is about 70%.

Although last night's CPI achieved an optimistic decline, the Fed announced its interest rate decision in the early morning, continuing to maintain the interest rate level of 5.5%. The dot plot then predicted that there would be only one 25 basis point rate cut this year. The hawkish dot plot significantly reduced the expectation of rate cuts. Among them, 15 of the 19 officials expected the Fed to cut interest rates this year, with the number of rate cuts ranging from 1 to 2 times. The dot plot did not convey a more optimistic number of rate cuts, which to a certain extent hit market confidence and caused the market to fall.

Powell's speech was also quite conventional. He said: We have made good progress in inflation, and Wednesday's report is moving in the right direction, but you can't be overly excited because of one data. If you want to lower interest rates, we need more data references.

Comments: CPI is good for the expectation of two rate cuts, but the dot plot only reflects one rate cut this year. Powell is still playing Tai Chi. US stocks ignore the hawkish dot plot. At the close, the S&P and Nasdaq hit new historical highs. The market is in adjustment. The dot plot only shows one rate cut, which is beyond Ming Ge's expectations (predicted to be 2 times). In addition, this time, the Fed's interest rate of 5.5% is the 7th consecutive time, which will not last long. Europe has already started to cut interest rates, and the Fed is also likely to cut interest rates soon. Continue to maintain the expectation of 2 rate cuts this year, hold firmly, exclude noise, and the bull market cycle is still there. #美国5月CPI超预期回落 #美联储何时降息？