Tony Welch of SignatureFD says weak June CPI strengthens the case that markets have overestimated the odds of a near-term Fed rate hike. Futures now show a low probability of a move this month, though CME Group pricing still leaves at least one hike this year possible. Welch says inflation is trending down even allowing for fuel swings and that wage growth is not broad enough to sustain economy-wide inflation. He expects Fed Chair Warsh to use his rhetoric to help anchor inflation expectations n

Tony Welch of SignatureFD says weak June CPI strengthens the case that markets have overestimated the odds of a near-term Fed rate hike. Futures now show a low probability of a move this month, though CME Group pricing still leaves at least one hike this year possible. Welch says inflation is trending down even allowing for fuel swings and that wage growth is not broad enough to sustain economy-wide inflation. He expects Fed Chair Warsh to use his rhetoric to help anchor inflation expectations near the Fed’s 2% target.