Markets rallied on the back of a significant drop in the inflation figure for the month of June. Overall, prices fell one percentage point from May to June, and the consumer price index rose 3% from a year earlier. It is worth noting that in May the inflation figure was at 4%. The core CPI, as measured by the Federal Reserve, fell to 4.8%, printing better than the consensus estimate of 5%. During May, the core figure was at 5.3%, therefore the drop is core also showed an improvement in the fight against inflation. Equities have rallied strongly on rising hopes that the Fed will halt its tightening cycle after last raising 0.25% at its next meeting on July 26. Thus, the markets have almost ruled out the additional increase that the Fed had considered at its meeting in June. Bond yields fell after the data and the 10-year bond yield lost between 0.18% and 3.77% after the report.
Ballestas Group
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