June CPI data supports market overestimation of Fed rate hike likelihood

Odaily Planet Daily News Tony Welch of SignatureFD stated that the market has overestimated the likelihood of the Federal Reserve raising interest rates. After the weak June CPI inflation data, futures markets reflected a lower probability of a rate hike this month, but data from the CME Group indicated that at least one rate hike this year remains possible. Welch said that regardless of fluctuations in fuel prices, inflation is trending downward. He noted that currently, there is no wage growth that could sustain broad-based inflation across the entire economy. Welch expects Fed Chair Powell to attempt to keep inflation expectations near the Fed's 2% target and use rhetoric to help set and stabilize those expectations.