Analyst: If the US CPI monthly rate turns negative, it will ease market concerns about the Federal Reserve’s upcoming rate hikes

Deep Tide TechFlow news: On July 14, analyst Matthew Weller said that whether inflation has already peaked is the market’s most pressing question ahead of the June CPI report. For the first time in three months, the Strait of Hormuz partially reopened in the second half of June, driving a sharp drop in energy prices, while the lagged impact of Trump’s now-defunct “Liberation Day” tariff may have already been largely absorbed by the market.

Against this backdrop, traders and economists expect overall inflation’s month-over-month rate to record negative growth for the first time in more than a year, which would ease market concerns about the Federal Reserve’s forthcoming rate hike. The federal funds futures market currently prices in a 35% probability that the Fed will raise rates at this month’s meeting; last month, under the relatively hawkish tone set by the new Fed chair, Waller, the odds were different. Although the hawkish view may be overly optimistic, an unexpected CPI report—together with Chair Waller’s appearances before the Senate and House audiences on Tuesday and Wednesday—could still trigger abnormal volatility across major markets amid uncertainty. (Jinshi)