The U.S. Consumer Price Index (CPI) rose 6.5% year-on-year last month, marking the sixth consecutive month of decline. Experts predict that U.S. interest rate hikes are coming to an end.

(AFP)

Chances of rate hike jump after February meeting

[Compile Wei Guojin/Comprehensive Report] The annual growth rate of U.S. inflation fell to the lowest point since October 2021 last month, indicating that price pressures have peaked under the Federal Reserve’s (Fed) historic monetary tightening measures. CME Group (CME) data showed that after the U.S. Department of Labor released inflation data on Thursday, the market bet on a rate hike after the Fed's February 1 meeting ○.

The odds of 25 percent (a yard) jumped to about 96 percent from 77 percent the day before.

The U.S. consumer price index (CPI) rose by six last month.

5%, the sixth straight month of decline, although still close to multi-decade highs, but down from 9.1% in June last year.

One percent slipped noticeably.

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The Fed raised interest rates four times ○.

Seventy-five percentage points later, last month's interest rate hike was reduced to 0.

Five percentage points, Fed officials are closely watching the latest inflation data to consider whether to switch to the more typical pace of rate hikes at the next policy meeting.

Philadelphia Fed President Stephen Harker said he supported a one-yard increase going forward, while Boston Fed President Collins also said she was leaning towards that option.

Market bets on interest rate cuts starting in the second half of the year

Evidence of falling inflation fueled investors' bets that the Fed would cut interest rates as soon as the second half of this year. According to CME Group data, market traders believe that the Fed raised interest rates twice before March this year, bringing the benchmark interest rate to about 4.5%.

Nine percent puts the chances at 90 percent, while there is a 60 percent chance of at least one rate cut by December.

Fed officials, however, appear to be sending a different message than the market.

At last month's meeting, Fed officials expected to continue raising interest rates to 5.5% this spring.

Around one percent, and there will be no rate cuts this year.

While the Fed and many investors see inflation falling this year, Fed officials have expressed unease that a strong labor market could underpin wage growth and keep inflation above the 2 percent target.

In addition, St. Louis Federal Reserve Bank President Bullard warned on Thursday that inflation may develop in the other direction again. "I think the current market pricing does not reflect this possibility enough."

Markets and Fed in 'game of chicken'

The Wall Street Journal reported that the market has fallen into a "game of chicken" with the Fed. Cowards), if you lose in the end, you will lose a lot.

The S&P 500 is now up 11 percent from its lows in late October, with much of that gain attributed to bets that the Fed will switch from raising rates to cutting them sometime this year.

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