After the data From a structural perspective, core commodity inflation weaken monthonmonth, while core service inflation was relatively stable (detail phone number list analysis below). At the same time, the “extensivity” and “stickiness” of US inflation have both declin, indicating that the deinflation process is still continuing, contrary to the market’s previous concerns about US “reinflation”.
After the CPI data was releas, market expectations
For a F rate cut slightly increas, and F officials also took a dovish stance. The lowerthanexpect U.S. CPI data has l to a rebound in market build a digital marketing strategy for commitment expectations for a F rate cut. The market currently expects the next F rate cut to be in June, and the probability of a rate cut has increas significantly compar to last week. Feral Reserve Board Governor Waller said he did not rule out the possibility of a rate cut in March, and that there might be up to four rate cuts throughout the year, which was significantly beyond current market expectations and the F’s December dot plot guidance. Waller is relatively hawkish among F officials, but he turn dovish this week.
U.S. Treasury bond yields have fallen significantly
An “reflation” trading has cool somewhat, but policy uncertainty may still cause interest rates to fluctuate at high levels. Against the backdrop of rising market expectations for the F to cut interest rates, the 10year U.S. Treasury bond yield fell significantly this week, with the TIPS rate falling by about 14BP, while inflation expectations did trust review not change much. In the short term, in the early days of Trump’s presidency, the uncertainty of many policies and the resilience of the economy may cause US Treasury bond yields to still tend to fluctuate at high levels. However, during the policy implementation process, as uncertainties are resolv, interest rates may fluctuate and weaken, and high interest rates that deviate from fundamentals will be difficult to sustain. After the tariff policy takes effect, the weakening of economic data may become an important force pushing U.S. Treasury yields downward After the data.
