Waller says inflation risks have surpassed employment risks, market focuses on July CPI

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Jinse Finance reported that on July 7, Federal Reserve Governor Waller stated that the U.S. labor market has stabilized, while inflation has accelerated again. The current inflation risk has exceeded employment risk, completely reversing the policy considerations from a year ago. He pointed out that last year, he supported rate cuts due to a weak job market, but now the policy focus should shift back to curbing inflation. The market is now turning its attention to the June CPI data to be released on July 14, which is the last key inflation reading before the Fed meeting on July 28-29. Although international oil prices have fallen back to around $70 per barrel, Fed officials still expect inflation to remain significantly above the 2% target by the end of the year. The market expects the Fed to raise rates no later than September, with a roughly 25% probability of a rate hike in July. Several officials have already signaled further tightening measures.
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