Wall Street rises again as bond traders bet on Fed rate hike in July disarm
An unexpected sharp drop in inflation sparked a rally in U.S. bond markets, with traders abandoning bets that the Federal Reserve could raise interest rates as early as this month. It's another rapid shift in the direction of Wall Street. Previously, the hawkish stance of Federal Reserve officials and the renewed war between the United States and Iran pushed up oil prices, and market speculation about a possible interest rate hike at the July 29 meeting was rampant. But the June consumer price index report released by the U.S. Department of Labor showed that CPI fell for the first time in six years, a development that will almost certainly buy the Fed some time. Futures traders then pushed back the potential timing of the Fed's interest rate hike to September or even October. U.S. stocks rose in response, while the dollar fell against all other major currencies. The two-year U.S. Treasury yield, which is closely related to changes in monetary policy, once plummeted 14 basis points to 4.14%, the largest drop since August last year. "Today's data negates the possibility of a rate hike in July," said Zach Griffiths, head of investment grade and macro strategy at CreditSights. "While inflation remains too high and the situation in the Middle East is deteriorating, today's data should be enough to keep them on the sidelines." Open a futures account on Sina's cooperative platform, safe, fast and guaranteed