The US market was not quiet last night.。

A sigh of relief! U.S. CPI data lower than expected to suspend interest rate hike expectations rise again

On the evening of April 12, the U.S. Department of Labor released March CPI data.。Data show that the United States in March did not adjust the annual rate of CPI recorded 5%, lower than the expected 5.2% and previous value 6.00%。U.S. core CPI not adjusted quarterly in March recorded an annual rate of 5.6%, in line with expectations, the previous value of 5.50%, ending five consecutive drops。US monthly CPI rate recorded 0 after March quarter adjustment.1%, expected 0.20%, previous value 0.40%。

After the release of the data, spot gold short-term higher than $10, the dollar index continued to fall, short-term lower than 50 points。

Non-U.S. currencies collectively higher, the pound against the dollar short-term higher than 50 points; the euro against the dollar short-term higher than 40 points; the dollar against the yen short-term lower than 70 points。The New Zealand dollar against the dollar short-term higher nearly 50 points, the Australian dollar against the dollar short-term higher than 50 points, the day rose more than 1%。USD / CHF drops below 0.90, hitting a new low since June 2021。

The data suggest that the lower-than-expected U.S. March quarter-adjusted annual and monthly CPI rates indicate a slowdown in U.S. inflation growth in March, but core services continue to emphasize the existence of inflation stickiness。

Breakdown, food prices were zero month-on-month and household food prices fell month-on-month, but the price of eating out continued its upward trend for nearly 12 months。

Energy prices from previous value -0.6% Expanded Decline to -3.5%, with gasoline prices falling 4% month-on-month in March..6%, natural gas services in energy services also fell 7.1%, continuing last month's decline。

Core commodities rose 0.2% (previous value 0%), of which used car prices narrowed, the month-on-month reading from February's -2.8% to -0.9%; new car prices continued their rally, up 0.4%。

Core services rose from 0 in February..6% narrowed to 0 in March.4%, mainly due to 0% of the previous value of the residential item..8% down to 0.6 per cent; transport services prices accelerated, with the March month-on-month increase from 1 per cent of the previous value..1% expanded to 1.4%, which has been positive for 8 consecutive months.。Core services excluding residential rose 0.29%, compared with the previous value of 0.43% down。The analysis pointed out that in the context of wage growth momentum is still fast, this indicator to further downward is not easy。

The U.S. Labor Office also said that housing inflation is by far the largest contributor to overall CPI growth, with the monthly increase in housing inflation offsetting the decline in the monthly rate of energy inflation.。

Following non-farm payrolls, the U.S. CPI data released last night is seen as a key basis for determining the Fed's May monetary policy。Overall, the U.S. CPI data was generally lower than expected, somewhat boosting market expectations for a pause in rate hikes。It has been suggested that if the Fed continues to raise interest rates due to the drag of the banking crisis, it could plunge the U.S. economy into recession early.。

Federal Open Market Committee member Thomas Barkin said today's CPI report was broadly in line with expectations, but there was still some way to go to bring inflation down to 2 percent.。The Fed will adjust the interest rate path based on a timely response to inflation.。

After U.S. inflation data, U.S. short-term interest rate futures prices show that the Fed is less likely to raise interest rates by 25 basis points in May。According to CME Fed Watch, the probability of the Fed keeping interest rates unchanged in May is 36.5%, the probability of a 25 basis point rate hike is 63.5%。The swap market shows that the Fed's benchmark interest rate is expected to be 50 basis points lower than the current level by the end of the year.。

Priya Misra, head of global interest rate strategy at TD Securities, said inflation remains high but has peaked.。If inflation starts to go down, the pressure on the Fed to raise rates will be reduced。

Pioneer Pilot Group senior international economist Andrew Patterson (Andrew Patterson) said that the recent U.S. bond yields are very volatile。Core inflation actually rose year-over-year this month, the Fed has more work to do。

CITIC Securities said, looking back at history, in addition to the 1960s to early 1980s U.S. monetary policy "forward-looking" period, other periods of the last interest rate hike is often in the core services inflation and core commodity inflation inflection point near, reflecting the end of the interest rate hike, the Federal Reserve will not raise interest rates after the prediction of core services inflation has appeared or is about to appear inflection point。With core services inflation not yet on a downward trend and the labor market still strong, the Fed is expected to continue raising interest rates by 25bps in May。With housing inflation at an inflection point and a further slowdown in the labor market, core services inflation is expected to trend downward, so the Fed is expected to stop raising interest rates after May。

However, there are also views that pulling inflation down is the Fed's most important goal, and the market is not expected to see the Fed cut interest rates prematurely.。

Wells Fargo chief economist Jay Bryson (Jay Bryson) said that if we achieve to achieve a soft landing, the estimated inflation rate will stay at 3-3.5% level for a period of time。If the Fed still needs to bring inflation back to 2%, the market won't see the Fed's rate cut until the end of the year。

San Francisco Fed President Mary Daly (Mary Daly) also said the Fed must monitor tight credit conditions to determine the path of interest rates and remain steadfast in its commitment to achieving the 2% inflation target.。

Fed 'warns' banking crisis could trigger recession this year

In addition, the Fed released the minutes of its March monetary policy meeting.。

According to the documents, Fed officials discussed the extent of the rate hike at one point during their last monetary policy meeting。

Some believe that a 50 basis point rate hike last month is appropriate due to persistently high inflation and recent strong economic data。However, there are also some who believe that changes in the banking sector could tighten financial conditions, affect the economy and inflation, support a 25 basis point rate hike, and see this as prudent。

The documents also show that the level of concern among Fed officials about banking problems and the overall state of the economy remains high, with Fed officials opening up a new borrowing facility for banks and lending terms for discount window emergency loans in the wake of the bankruptcy of Silicon Valley Bank and two other institutions.。The Fed also "warned" that the banking crisis could allow the U.S. economy to spark a recession later this year.。

Coincidentally, on April 11, the International Monetary Fund (IMF) also lowered its global economic growth forecast for this year, from 2.9% down to 2.8%, down from 3 in 2022.4%。According to the IMF, the likelihood of a hard landing has risen sharply, meaning that higher interest rates could weaken growth and lead to a recession, especially in the world's richest countries.。

On the whole, the lower-than-expected CPI data did reduce the pressure on the Fed to raise interest rates, after all, the banking crisis has not disappeared, the credit tightening situation has not been completely reversed, the U.S. economic outlook is still dusty, if this time again significantly raise interest rates, it is difficult to ensure that the economy will fall into recession in advance。On the other hand, the U.S. inflation stickiness is still there, the Fed's year-long goal of reducing inflation has not yet been completed, but given the current economic situation, it is foreseeable that the Fed may intervene in the economy in a more moderate way, like this March rate hike of 25 basis points + open borrowing tools may be used more.。

After all, if you really have to deal with "triggering a recession later this year," how can you do it with less preparation?？

As of press time, spot gold continues to rise in the day, challenging the previous high of 2032.$13, now reported for 2017.$80, up 0.17%。