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2026-07-14 21:22:13
[Unexpectedly Cooling Inflation Causes Dollar Bulls to Collapse, Rate Hike Bets Encounter a Chill] ⑴ US June CPI fell 0.4% month-on-month and slowed to 3.5% year-on-year, both below market expectations. The weak data directly extinguished the urgent expectation of a Fed rate hike this month. ⑵ Institutional strategists commented that traders quickly lowered their bets on a July rate hike, putting downward pressure on the dollar index, which further widened its decline overnight during the Asian session. ⑶ In the currency market, the dollar fell against commodity currencies and interest rate-sensitive currencies across the board. The Australian dollar and Canadian dollar received short-term buying support, while the Japanese yen rebounded. ⑷ Cooling inflation eased upward pressure on US Treasury yields. Short-term interest rate futures pricing indicates that the probability of a rate hike this month has fallen to a low level, and the market is beginning to reassess the tightening path. ⑸ In terms of sentiment, investors have shifted from anxiety about "higher and longer" rates to anticipation of a soft landing for the economy, but some funds remain wary that repeated data fluctuations may trigger further revisions to expectations. (6) The focus will now shift to next week's retail sales and speeches by Federal Reserve officials. If consumer spending proves more resilient than expected, the dollar's decline may face a test of stabilization.
