Global Markets Rally as Fed Hike Bets Plunge Ahead of Crucial US CPI Report
Slashing Fed rate hike odds from 67% to 44% has given global risk assets breathing room ahead of Wednesday's critical US CPI report. Wall Street's record high and softening Treasury yields offer momentum, but rising oil prices threaten to re-ignite inflation fears. Core CPI will decide whether digital assets can maintain this upward push.
Rate hike expectations are plummeting across global derivatives desks as softer labor data forces traders to recalibrate. Futures pricing now shows just a forty-four percent probability of a September Federal Reserve rate hike, down sharply from sixty-seven percent last week. Lower Treasury yields and a softening dollar are providing an immediate boost to risk assets across the board.
The key catalyst now sits squarely on Wednesday's inflation print. Analysts project headline CPI to edge up zero point one percent, with core consumer prices expected to tick higher by zero point two percent. Should core inflation print cooler than anticipated, risk appetite will likely expand, giving Bitcoin and broader market positions room to push higher in the short term.
However, energy costs present a volatile wild card that could quickly disrupt the trend. Oil prices jumped over zero point eight percent on Monday as ongoing geopolitical friction surrounding crucial shipping channels continues to restrict supply flow. A persistent surge in crude oil threatens to leak directly into headline CPI numbers, potentially forcing rate hike fears right back onto trader screens.