$BTC US June CPI falls to 3.5%, below market expectations

US June CPI rose 3.5% year-on-year, significantly lower than the expected 3.8%; month-on-month it fell 0.4%, the first month-on-month deflation since 2020. Core CPI also lagged expectations, rising 2.6% year-on-year. This data directly overturns the hawkish signals previously released by Waller, and the market quickly cut the probability of a rate hike in July. Falling energy prices, along with a synchronized cooling in rent and services inflation, are the main drivers behind this sharp weakening in inflation.
In the short term, markets immediately shifted into a more dovish stance: US Treasury yields declined, the dollar weakened, gold rebounded, and semiconductors and AI growth stocks—previously under pressure—entered a valuation repair window. But it’s important to stay rational and make clear distinctions: a decline in inflation does not equal meeting the target; current core inflation is still above the 2% goal. Fed officials have repeatedly emphasized that a single month of data is not enough to confirm a trend, and rate-hike options will not be completely removed—there is still uncertainty in September.
Geopolitical risk remains the biggest hidden threat. Developments in the Strait of Hormuz can disrupt oil prices at any time; if energy prices strengthen again, inflation faces the risk of rebounding once more. In China’s context, pressure on US Treasuries may ease temporarily, and Northbound funds’ sentiment improves at the margin. Looking ahead, investors should not blindly and one-sidedly bet on sustained easing; focus on tracking July’s non-farm payrolls and core PCE data, and watch whether inflation can continue to fall steadily month after month.
(Sharing macro views only, not investment advice) ‌