Traders bet on a 50% chance of a September rate hike, as the market relies on CPI data
Swap market trading shows that the probability of traders taking into account a 25 basis point rate hike in September is about 50%. Under the leadership of Federal Reserve Chairman Kevin Walsh, the Fed has reduced its forward guidance, and the market relies on hard data to determine policy paths. If the CPI data for July is moderate, it may weaken the reason for interest rate hikes. If it exceeds expectations, it may increase the possibility of a rate hike in September. The pricing of 10-year US Treasury yields is tilted towards a moderate downward trend driven by July CPI. AI interpretation: CPI data directly determines the marginal shift of the Federal Reserve's monetary policy and is the core anchor point for current market pricing. The fluctuation of inflation data directly affects the probability of interest rate hikes, reflecting the market's high sensitivity to policy paths. This data is not only a barometer of interest rate expectations, but also a key variable driving the reconstruction of the US Treasury yield curve. The market has completed the final confirmation of the Federal Reserve's tightening cycle through the game of inflation data.