Analyst: June inflation data support the market ' s view of overestimating the Fed ' s interest rate potential

On 14 July, Tony Welch of Signature FD stated that the market overestimated the possibility of the Fed raising interest rates. Following the publication of weak CPI inflation data in June, the futures market reflected a lower probability of interest rate hikes this month, but, according to data from Chiffon, at least once this year is still possible. Welch states that, regardless of the volatility of fuel prices, inflation is on a downward trend. “We simply did not see the kind of wage growth that would support widespread inflation throughout the economy in the long term”, he said. He expected Fed Chairman Walsh to try to keep inflation expectations near the Fed ' s target of 2 per cent. “I do think he is trying to use his words to help set and keep inflation expectations stable”, he said。