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The latest released U.S. core Consumer Price Index for July (CPI) has attracted widespread attention from the market. The data shows that the core CPI in July increased by 3.1% year-on-year, which not only exceeds last month's 2.9%, but also surpasses the market's general expectation of 3%, reaching a new high in nearly five months.
This data breaks the market's expectation of a continued decline in inflation. As an important economic indicator that excludes the impact of food and energy price fluctuations, the rise in core CPI indicates that inflationary pressures are accumulating. This trend may have significant implications for the Federal Reserve's policy direction, with the likelihood of a rate cut in September rapidly diminishing.
Given the current level of inflation and the significant gap between it and the Federal Reserve's 2% policy target, the Federal Reserve may continue to maintain a high interest rate environment and may not rule out the possibility of further tightening monetary policy.
The release of this data immediately triggered a chain reaction in the financial markets. The US dollar may gain support and strengthen as a result, while government bond yields are expected to rise. The Nasdaq index, which is mainly composed of technology stocks, may face adjustment pressure, and the prices of safe-haven assets like gold may also come under pressure.
It is worth noting that despite the core CPI data exceeding expectations, the US stock market still performed strongly, showing an upward trend after the opening. This seemingly contradictory market reaction has prompted investors to think deeply about the future direction of the economy.
At the same time, significant changes have occurred in the cryptocurrency market. Ethereum (ETH) has surpassed $4300, Bitcoin (BTC) has returned to the $120,000 mark, and Bitcoin's market value briefly exceeded that of Amazon. These changes reflect investors' increasing confidence in cryptocurrency as a hedge against inflationary pressures.
Overall, the release of this CPI data has not only affected traditional financial markets but has also had a profound impact on the cryptocurrency market. Investors need to closely monitor subsequent economic data and policy directions in order to adjust their investment strategies in a timely manner.