analyst: US CPI month-on-month rate may record negative growth, which will ease market concerns about the Fed's imminent rate hike

Odaily Planet Daily News Analyst Matthew Weller stated that whether inflation has peaked is the market's biggest concern ahead of the June CPI report. For the first time in three months, the Strait of Hormuz was partially reopened in the second half of June, leading to a significant drop in energy prices, while the lagged impact of Trump's now-expired "Liberation Day" tariffs may have largely been priced in by the market. Against this backdrop, traders and economists expect the overall month-on-month inflation rate to record its first negative growth in over a year, which would ease market concerns about the Fed's imminent rate hike.

The federal funds futures market currently prices a 35% probability of a rate hike at the Fed's meeting this month, following a relatively hawkish tone at last month's meeting under the leadership of newly appointed Fed Chair Warsh. Although the hawkish expectations may be overly optimistic, an unexpected CPI report, combined with Chair Warsh's testimony before the Senate and House on Tuesday and Wednesday, could still trigger abnormal volatility in major markets amid uncertainty. (Jin Shi)