At 21:30 on 7/11, the US will release the latest CPI inflati...

At 21:30 on 7/11, the US will release the latest CPI inflation data. Since Federal Reserve Chairman Powell attended public hearings for 2 consecutive days and suggested further developments in inflation, the latest CPI will have a big impact on the possibility of interest rate cuts in September.

After an unexpected rise in the first few months of this year, it appears that CPI inflation is finally moving in the right direction. The PCE inflation rate has improved, but the inflation rate in the service sector remains high in both the CPI and PCE indicators. Previously, against the backdrop of the still tight labor market, the Fed's “higher” stance not only made sense, but even strongly suggested additional interest rate hikes in early 2024.

Not only is inflationary pressure weakening again, but there is growing evidence showing that the hot labor market is cooling down,The balance between supply and demand has been restored according to Fed Chairman PowellIt is stated. According to the June non-farm payroll report, the unemployment rate rose to 4.1%, a high level since 2021/11, and the annual growth rate in the number of employed people retreated to just under 4.0%. The increase in the number of people employed in the non-farm sector was slightly higher than expected, but the figures for the previous two months were simultaneously revised downward by a total of about 0.11 million people.

Now that the slowing down in the job market has become more certain, there may be little reason for the Fed to maintain a cautious and patient stance next.If the consumer price index (CPI) inflation rate slows further, there is a possibility that it will lean further in a direction favorable to the dovish faction.

On Wall Street, there is a widespread view that this week's consumer price index (CPI) will show a further decline in the US inflation rate.