July rate hike probability stands at only 13% as US core inflation eases recent Fed concerns

Odaily reported that US CPI data for May showed inflation surging to a three-year high, but the moderate rise in core prices has alleviated Wall Street's concerns about interest rate hikes.

Today's CPI data and tomorrow's PPI figures are expected to influence the Federal Reserve's policy stance, which will be announced a week later when Kashkari chairs the Fed meeting for the first time. According to the CME FedWatch, before the release of the CPI inflation data, the market had already priced in a 70% probability of the Fed raising interest rates by the end of 2026.

However, the market believes that a rate hike at next week's Fed meeting is almost impossible, with the probability of a rate hike at the July meeting standing at just 13%. The short-term focus lies on whether the Fed will clearly shift from an accommodative stance to a neutral or tightening stance at its upcoming meeting. This week's CPI and PPI inflation data, along with progress in US-Iran negotiations, could influence the balance between neutrality and tightening. (Jinshi)