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Bitunix Analyst: Today's CPI Data May Further Boost Rate Hike ExpectationsBlockBeats News, June 10th. Over the past year, the market has been consistently pricing in the "when to cut rates," but recent data has led investors to contemplate another question—If inflation heats up again while the economy and employment remain strong, will major global central banks need to return to a path of rate hikes?
Tonight's release of the U.S. May CPI will be a key validation point. The market expects the year-on-year rate to rise to 4.2%, breaking above 4% for the first time in nearly three years. It is worth noting that this round of inflation is no longer just a simple surge in energy prices; energy, tariffs, and service industry costs are all pushing up price pressures simultaneously, while wage growth lags behind inflation, indicating that real purchasing power continues to erode. For the Fed, what really needs attention is not just the monthly data, but whether inflation expectations are beginning to spiral out of control once again.
More importantly, the bond market has already begun pricing this in. From SOFR options to the U.S. Treasury market, a significant amount of funds are betting that the Fed may hike rates again as early as September. The yields on U.S. 2-year and 10-year Treasury bonds have been steadily rising recently, reflecting that the market has gradually accepted the possibility of "higher for longer" or even "limited hikes." This is also the core reason for the recent volatilities in the tech stocks, gold, and crypto markets. The market's concern is not about an economic recession, but rather about the return of funding costs.
Meanwhile, the market almost unanimously expects the Bank of Japan to raise rates by 25 basis points to 1% next week, reaching the highest level since 1995, and there is even a possibility of another hike in October. If Japan officially enters a rate hike cycle, it means that the ultra-loose policy that has supported global liquidity for over a decade is gradually unwinding. When the U.S., Japan, and Europe all start discussing policy tightening, the rise in global funding costs will no longer be a singular country's issue but a global liquidity reassessment.
For the crypto market, the biggest variable at the moment is still liquidity. As the market begins to trade with global central banks synchronously tightening, bond yields continuously rising, and the fund-suction effect brought by large-scale AI industry financing, high-risk assets will face a more stringent valuation test. Tonight's CPI data will not only reflect the level of inflation but may also become a crucial turning point in determining the pricing direction of global assets in the second half of the year.
