[Analyst Predicts U.S. CPI Monthly Rate to Record Negative Growth, Easing Market Concerns Over Fed Rate Hikes]
According to Jintou News, analyst Matthew Weller stated that traders and economists expect the U.S. overall inflation monthly rate to record its first negative growth in over a year, which would ease market concerns about imminent rate hikes by the Federal Reserve. The federal funds futures market is currently pricing in a 35% probability of a rate hike at this month's Fed meeting. Last month, under the leadership of newly appointed Fed Chair Kevin Walsh, the meeting tone was relatively hawkish. An unexpected CPI report, coupled with Fed Chair Kevin Walsh's testimony before the Senate and House on Tuesday and Wednesday, could still trigger significant volatility in major markets amid uncertainty.
AI Interpretation: A negative CPI monthly rate directly breaks the expectation of sustained inflationary pressure, signaling a substantial easing of price pressures. This data reduces the necessity for further Fed rate hikes, prompting the market to quickly adjust its previously overly aggressive tightening pricing. The establishment of a cooling inflation trend provides critical support for a shift toward more accommodative monetary policy. Market sentiment will shift from fears of rate hikes to a reassessment of the pace of rate cuts, leading to a shift in the focal point of asset price volatility.
