Implications of the US inflation figures – Commerzbank

By: bitcoin ethereum news|2025/05/14 18:15:05
0
Share
copy
The US Dollar (USD) depreciated significantly yesterday following the weaker-than-expected US inflation data. At first glance, this may seem logical. After all, subdued inflationary pressure favours potentially faster interest rate cuts by the Fed. However, the reaction was anything but trivial. One could just as well argue that the risks of stagflation have diminished, which would be positive for the dollar, Commerzbank’s Head of FX and Commodity Research Thu Lan Nguyen notes. FX market react to the US CPI figures with USD weakness “However, the fact that the FX market reacted to the figures with dollar weakness could also be due to something else: The US president is likely to feel vindicated by the result. And this does not mean the – admittedly significantly lower – egg prices, but above all the lack of a tariff effect in the April price data, which may have surprised some. Of course, explanations can be found: Sufficient inventory, for example, which allow companies to delay price increases. However, the fact is that so far there has been little sign of the horrendous price increases that were feared. This is good news for those in favour of a tough US tariff strategy, as it reduces the pressure on the US government to withdraw tariffs as quickly as possible and present ‘deals’ with trading partners.” “On the other hand, however, the inflation figures also show that the impact of the tariffs could be more difficult to assess than expected. This does not make things any easier for the US Federal Reserve and may suggest that it is more likely to hold off on a possible interest rate cut. Even if the recent agreement between the US and Chinese governments on a significant reduction in reciprocal tariffs has reduced the price risks, there is likely to be agreement that a tariff of 30% on imports from China still has a significant inflationary effect.” “This could be all the more the case as Fed Chairman Jay Powell is under fire from US President Trump. The latter could not resist lashing out at Powell on his favourite social media channel yesterday after the inflation figures. If only to underpin the independence of the US central bank, it could be worthwhile for the Fed to continue to reject hopes of rapid interest rate cuts. After all, inflation has not fallen massively short of expectations (0.2% instead of 0.3% compared to the previous month according to the Bloomberg survey). Perhaps we shouldn’t get carried away?” Source: https://www.fxstreet.com/news/implications-of-the-us-inflation-figures-commerzbank-202505140859

You may also like

Tiger Research: What AI services do cryptocurrency companies offer?

Cryptocurrency giants like Binance and Coinbase have fully launched an AI defense battle: Driven by FOMO sentiment, leading platforms are accelerating the deep integration of AI agents into core businesses such as trading, security, and payments.

The war not only drives up oil prices but also causes Circle's stock price to soar

High interest rate expectations combined with the explosive growth of stablecoin infrastructure have led to Circle's stock price doubling in five weeks against the trend: Understanding the dual game of "macro interest rate trading" and "global payment foundation" behind the surge in one article.

When agents become consumers, who will rewrite the underlying logic of internet commerce?

Thirty years ago, due to the high cost of micropayments, the internet had no choice but to adopt an advertising model. Today, the technical threshold for micropayments is nearly zero, but trust has become the most expensive luxury. Whoever can bridge this gap will dominate the next generation of int...

AI Agents in Action Summit: March 31, Hong Kong Cyberport, focusing on the deep waters of AI implementation

Tomorrow, Hong Kong Cyberport will grandly open. The "AI Agents in Action" summit gathers top experts, directly addressing the real evolution of AI Agents from conceptual celebration to productization and large-scale commercial implementation.

29 Days In, What Are America’s Options on Iran?

The key is not in ground invasion but in the combination of striking capability and governance.

Flash Crash Down 97%+ with Ongoing Unlocking, WLD Completes $65 Million Off-chain Funding: Who Is Still Buying?

In the current deep bear market environment, being able to complete multi-million dollar token trades is quite rare.

Popular coins

Latest Crypto News

Read more