Bitunix Analyst: May CPI Data May Reinforce Hike Expectations

Huo Xing Finance reports: On June 10, the market has spent the past year pricing in “when will rates be cut,” but recent data has led investors to consider another question: If inflation reignites while the economy and labor market remain strong, will major central banks globally be forced to return to a path of rate hikes? The upcoming release of U.S. May CPI tonight will serve as a critical litmus test. Markets expect the annual growth rate to rise to 4.2%, marking the first time in nearly three years that it has returned above 4%. Notably, this round of inflation is no longer driven solely by rising energy prices—energy costs, tariffs, and service-sector expenses are all simultaneously increasing price pressures, while wage growth continues to lag behind inflation, eroding real purchasing power. For the Fed, the real concern is not single-month data, but whether inflation expectations are beginning to spiral out of control again. More importantly, bond markets have already priced this in. From SOFR options to the U.S. Treasury market, substantial capital is betting that the Fed could resume hiking rates as early as September. Recent sustained rises in the yields of U.S. 2-year and 10-year Treasuries reflect growing market acceptance of the possibility of “higher for longer” or even “limited hiking.” This is the core reason behind increased volatility in tech stocks, gold, and crypto markets—investors are not fearing recession, but rather a resurgence in funding costs. Meanwhile, markets overwhelmingly expect the Bank of Japan to raise its policy rate by 25 basis points to 1% next week—the highest level since 1995—with further hikes possible as early as October. If Japan formally enters a tightening cycle, it signals the gradual withdrawal of ultra-loose monetary policies that have supported global liquidity for over a decade. When the U.S., Japan, and Europe are all discussing policy tightening, rising global funding costs will no longer be a single-country issue, but a global re-pricing of liquidity. For crypto markets, the biggest uncertainty remains liquidity. As markets begin pricing in synchronized global central bank tightening, persistently rising bond yields, and the capital suction effect from massive AI sector fundraising, high-risk assets will face stricter valuation scrutiny. Tonight’s CPI data will not only reflect inflation levels—it may also become a pivotal turning point determining the direction of global asset pricing for the second half of the year.