The US CPI data for February was released as expected, with overall performance lower than market expectations. The unadjusted CPI annual rate was 2.8%, lower than the expected 2.9%, the lowest since November last year; the seasonally adjusted CPI monthly rate was only 0.2%, lower than the expected 0.3%, a new low since October last year. The core CPI was also weak, with the unadjusted core CPI annual rate falling to 3.1%, lower than the expected 3.2%, the lowest since April 2021; the core CPI monthly rate was only 0.2%, lower than the expected 0.3%. Among the sub-items, the energy CPI annual rate fell from 1% to -0.2%, the housing CPI annual rate fell from 4.4% to 4.2%, the food CPI annual rate rose slightly to 2.6%, and the new and used car CPI annual rates remained at -0.3% and 0.8%, respectively. The data reflects that the growth of US consumer prices slowed significantly in February, but it was still higher than the Fed's 2% target.
After the data was released, the market reacted quickly and violently. The US dollar index plunged 31 points in a short period of time, and then rebounded more than 37 points, reaching a high of 103.7331, indicating that the market has different interpretations of the slowdown in inflation. In the foreign exchange market, GBP/USD jumped to 1.2990, the highest since November 7, while EUR/USD once surged to 1.0933 before falling back, showing a short window for the dollar to weaken.
The CPI data was lower than expected, which directly ignited the market's optimism about the Fed's interest rate cut. Traders quickly adjusted their bets, increasing expectations for at least two rate cuts this year, and generally believed that the Fed will restart rate cuts in June. Short-term interest rate futures narrowed their earlier losses after the data was released, indicating that the market's expectations for the Fed's meeting next week (March 19) to maintain interest rates in the range of 4.25%-4.50% remain unchanged, but the expectation of medium-term easing has clearly heated up. Stephen Juneau, an American analyst at Bank of America Securities, warned: "The longer inflation is above the Fed's target, even if it is due to temporary factors, the more likely it is that expectations will turn upward, which will make the Fed's task of restoring price stability more difficult." This view suggests that if inflation rebounds in the coming months due to external factors (such as rising import costs), the pace of interest rate cuts may be hindered again.
In short, the February CPI data injected a shot of adrenaline into the market, but the twists and turns of the inflation path and the uncertainty of the economic outlook mean that traders need to find a balance between optimism and caution.
XAUUSD XAUUSD XAUUSD XAUUSD
After the data was released, the market reacted quickly and violently. The US dollar index plunged 31 points in a short period of time, and then rebounded more than 37 points, reaching a high of 103.7331, indicating that the market has different interpretations of the slowdown in inflation. In the foreign exchange market, GBP/USD jumped to 1.2990, the highest since November 7, while EUR/USD once surged to 1.0933 before falling back, showing a short window for the dollar to weaken.
The CPI data was lower than expected, which directly ignited the market's optimism about the Fed's interest rate cut. Traders quickly adjusted their bets, increasing expectations for at least two rate cuts this year, and generally believed that the Fed will restart rate cuts in June. Short-term interest rate futures narrowed their earlier losses after the data was released, indicating that the market's expectations for the Fed's meeting next week (March 19) to maintain interest rates in the range of 4.25%-4.50% remain unchanged, but the expectation of medium-term easing has clearly heated up. Stephen Juneau, an American analyst at Bank of America Securities, warned: "The longer inflation is above the Fed's target, even if it is due to temporary factors, the more likely it is that expectations will turn upward, which will make the Fed's task of restoring price stability more difficult." This view suggests that if inflation rebounds in the coming months due to external factors (such as rising import costs), the pace of interest rate cuts may be hindered again.
In short, the February CPI data injected a shot of adrenaline into the market, but the twists and turns of the inflation path and the uncertainty of the economic outlook mean that traders need to find a balance between optimism and caution.
XAUUSD XAUUSD XAUUSD XAUUSD 
This account has been restricted from publishing. Traders who continue to follow my signals and make profits can click 👉 to leave me a message. Telegram: t.me/BeckLedley
Channel: t.me/FcCygjylf
Channel entrance:t.me/FcCygjylf
Channel: t.me/FcCygjylf
Channel entrance:t.me/FcCygjylf
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
This account has been restricted from publishing. Traders who continue to follow my signals and make profits can click 👉 to leave me a message. Telegram: t.me/BeckLedley
Channel: t.me/FcCygjylf
Channel entrance:t.me/FcCygjylf
Channel: t.me/FcCygjylf
Channel entrance:t.me/FcCygjylf
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.