From today, remember a term: future imported inflation.

Last night, the U.S. released inflation data; the CPI met market expectations, while the core CPI was slightly below market expectations—logically, this is good news, but the market does not see it that way.

First, the sub-item data shows that the impact of inflation is becoming evident. Imported goods like curtains, carpets, home appliances, sports goods, and toys have seen significant price increases; especially, appliance prices surged by 1.9%, marking the largest increase in nearly 4 years—products affected by Trump's tariffs are starting to show clear price hikes. Although car prices have dropped to help 'control the overall situation', overall, the structure of inflation is quietly changing. While the inflation numbers do not seem alarming, one can already sense that 'tariffs are quietly pushing prices upward'—this is also why we added the prefix 'future, imported' at the beginning; this round of inflation is different from the inflation the Federal Reserve has fought in the past (not caused by strong demand).

Second, based on our preliminary calculations, the core PCE inflation rate for June (the inflation indicator favored by the Federal Reserve) to be released at the end of the month may remain around 2.7% or may slightly rise to 2.8%. While looking at just one month of data may not mean much, when we string together the data for April (2.6%), May (2.8%), and June, the trend is not optimistic. This is why the Federal Reserve will not make decisions based on one piece of data, but will look at the trend. The faction within the Federal Reserve that says 'we need more evidence' may gain the upper hand again at the meeting at the end of this month.

Third, it is not yet at the stage of 'comprehensive inflation'; many companies are still clearing out inventory (goods from before the tariffs took effect), and real price pressure may only become evident in July or August.

Fourth, after the data was released, the market no longer believes the Federal Reserve will cut rates in July, and expectations for a September rate cut have dropped from 'almost certain' to 'around 50%'.

Fifth, the market has displayed the classic structure of 'dollar up, everything down'; the familiar scene has reappeared every morning. More dangerously, this round of dollar appreciation is accompanied by a surge in U.S. Treasury yields, with the 30-year Treasury yield having reached 5%, which is more frightening than short-term rates.

Remember the first sentence at the beginning of this article; it will not wake you up overnight, but it will quietly change the pricing logic of this world without you noticing.