Analyst: June inflation data supports the view that the market is overestimating the likelihood of the Federal Reserve raising interest rates

Golden Finance reported that on July 14, Tony Welch of SignatureFD said the market has overestimated the likelihood of the Federal Reserve raising interest rates. After the weak CPI inflation data was released in June, the futures market indicated a lower probability of a rate hike this month, but according to data from the CME, it is still possible that the Federal Reserve will raise rates at least once this year. Welch said that regardless of how fuel prices fluctuate, inflation is trending downward. “We just haven’t seen the kind of wage growth that would broadly support inflation across the entire economy in the long run,” he said. He said he expects Federal Reserve Chair Woush to try to keep inflation expectations near the Federal Reserve’s 2% target. “I do believe he is trying to use his words to help set and maintain inflation expectations stable,” he said.
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