HTX DeepThink: Rate cuts are unlikely to stabilize the market; inflation could be the key factor

HTX DeepThink’s Chloe noted that the recent Federal Reserve rate cut failed to rekindle risk appetite in US markets. Challenges posed by artificial intelligence have negatively impacted market sentiment, affecting stock and bond performance.

Despite dovish signals, long-term US Treasury yields have risen, indicating reevaluation of inflation expectations. Key inflation data will influence dollar value and asset recovery, with current CPI at 3% above the Fed’s 2% target.

The determination of market direction hinges on inflation data rather than interest rate cuts. A significant drop in CPI could ease the dollar, but persistent inflation may lead to increased volatility in markets.