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2026-07-14 21:36:11
[Woller's Hawkish Stance Drowned Out by Dovish CPI Data, July Rate Hike Probability Evaporates, Fed Threshold Raised Sharply] ⑴ Federal Reserve Governor Waller released hawkish signals on Monday, suggesting that strong core CPI data might support a near-term rate hike. However, Tuesday's inflation data provided a completely different, dovish answer. ⑵ The US core CPI was flat month-on-month in June, and the year-on-year increase fell to 2.6%, both below market expectations. This result directly weakened the urgency for the Fed to take action in the short term. ⑶ Interest rate market pricing shows that the probability of a July rate hike has plummeted to about 15%, essentially erasing all gains after Waller's speech. Investors have almost completely ruled out action this month. ⑷ Analysts point out that while the door to another rate hike this year is not completely closed, the threshold has significantly increased, and future policy shifts will require stronger data or event-driven factors. ⑸ The biggest uncertainty currently stems from the Middle East geopolitical situation. If the conflict escalates, leading to damage to energy supplies and a continued rise in oil prices, it could reignite inflation and force central banks to respond. (6) Prior to this, the Federal Reserve is more likely to maintain the current interest rate level, and the market focus will shift to the game between the subsequent inflation trend and the resilience of the economy.
