Brothers and sisters, listen up — let me tell you about something that’s currently hot in the market.
Just now, the U.S. CPI report has been released. Now you might be wondering, what exactly is CPI? CPI stands for Consumer Price Index — it basically tells us how expensive everyday items are getting, like milk, eggs, fuel, vegetables, etc. If the CPI is high, that means things are getting more expensive — in other words, inflation is rising.
Now what is Core CPI? It’s like CPI’s cousin, but it doesn’t include food and fuel because those prices fluctuate too much. Core CPI is more stable, and the Fed (which is the U.S. central bank) pays more attention to this when deciding on interest rate cuts or hikes.
According to the latest report, the U.S. CPI came in at 2.7%, which was exactly as expected. Core CPI came in at 2.9%, which is slightly better than expected. So now the market’s mood has turned positive — why? Because it shows inflation is slowing down. And when inflation slows down, the Fed gets a chance to cut interest rates, meaning rates could go lower.
What does a rate cut mean? Basically, when the Fed cuts interest rates, it becomes easier to borrow money, more cash flows into the market, and then the stock market and crypto usually pump.
Right now, the market expects that the Fed might cut rates by September 2025, with a 58% chance of that happening. But in the upcoming July FOMC meeting, the chance of a rate cut is only 3%.
So for now, the market is relaxing — but the real fun begins when the Fed actually cuts rates. As for me, I’m still waiting for the market to go down since I sold before July 13th.