Bitunix Analyst: Today's CPI data may further boost expectations for an interest rate hike cycle

BlockBeats News, June 10 — Over the past year, the market has been pricing in "when to cut interest rates," but recent data has investors starting to consider another question — if inflation heats up again, and the economy and employment remain strong, must major global central banks revert to rate hikes?

Tonight’s upcoming U.S. May CPI will serve as a key validation point. The market expects the year-over-year increase to rise to 4.2%, marking the first time in nearly three years to return above 4%. Notably, this round of inflation is no longer just due to rising energy prices; energy, tariffs, and service industry costs are simultaneously pushing up price pressures, while wage growth lags behind inflation, indicating that real purchasing power continues to erode. For the Federal Reserve, what needs to be truly watched is not just monthly data, but whether inflation expectations are beginning to spiral out of control again.

More importantly, the bond market has already priced this in first. From SOFR options to the U.S. Treasury market, large amounts of capital are betting that the Fed could resume rate hikes as early as September. Recently, the yields on the 2-year and 10-year U.S. Treasury bonds have continued to rise, reflecting that the market is gradually accepting the possibility of "higher for longer" or even "limited" rate hikes. This is also the core reason behind the recent increased volatility in tech stocks, gold, and crypto markets — market concerns are not about a recession, but about the re-escalation of funding costs.

Meanwhile, the market almost unanimously expects the Bank of Japan to raise interest rates by 25 basis points to 1% next week, reaching the highest level since 1995, with some even predicting another rate hike in October. If Japan officially enters a rate hike cycle, it would mean that the ultra-loose policies supporting global liquidity over the past decade are gradually being phased out. When the U.S., Japan, and Europe all begin discussing tightening policies, the rise in global funding costs will no longer be a single-country issue but a global liquidity re-evaluation.

For the crypto market, the biggest variable remains liquidity. As markets begin to price in synchronized tightening by global central banks, rising bond yields, and the capital siphoning effect from large-scale financing in the AI industry, high-risk assets will face more stringent valuation tests. Tonight’s CPI data will not only reflect inflation levels but could also become a crucial turning point in determining the pricing direction of global assets in the second half of the year.