As international oil prices keep rising, with the 10-year US Treasury yield breaking above 4.7% and the US Dollar Index moving back above 101, the market has begun to worry that inflation pressure may resurface.

Against this backdrop, CME data shows that expectations for the Federal Reserve’s rate decision to raise rates by 25 basis points in July have rebounded to 37.9%, the probability of keeping interest rates unchanged has fallen to 62.1%, and expectations for rate cuts have basically exited market pricing.

For risk assets, higher oil prices mean increased inflation pressure; higher US Treasury yields raise the opportunity cost of capital; and a stronger US dollar would attract global funds back into US dollar-denominated assets. With these three factors compounding, they typically create some pressure on risk assets, including cryptocurrencies.

However, for now the market still believes that keeping interest rates unchanged is the higher-probability scenario; the rate-hike outlook has only warmed up, and this does not mean the outcome has been determined.

What is truly worth watching is the Federal Reserve’s rate decision to be released at 2:00 a.m. Beijing time on July 30, and the policy signals released afterward, which will determine whether market expectations for future liquidity will change further.#夏日创作营