Core CPI in the U.S. rose by 3.1% year-on-year in July, exceeding the market expectation of 3% and the previous value of 2.9%, reaching a nearly five-month high. This data breaks the market expectation of continuously easing inflation, indicating that underlying price pressures are resurfacing.
As a key inflation indicator closely monitored by the Federal Reserve, the unexpected rebound in core CPI directly affects monetary policy expectations. The interest rate futures market shows that the probability of a rate cut in September has plummeted from 68% before the data release to 35%, with some institutions even beginning to discuss the possibility of further rate hikes.
After the data was released, financial markets reacted swiftly:
The dollar index jumped 0.8% in the short term
The yield on the 10-year U.S. Treasury bond broke above 4.3%
The Nasdaq 100 futures fell 1.2%
Risk assets like Bitcoin briefly dropped by 3%
