US CPI data in May was lower than expected, which boosted investors' confidence that the Fed may begin cutting interest rates in the coming months.

According to data from the US Bureau of Labor Statistics, seasonally adjusted CPI for May remained unchanged at 0%, the first time since June of last year that it did not increase. Economists originally predicted a growth of 0.1%.

Energy prices saw the largest decline at -2.0%. Housing costs, including housing, rose for the fourth consecutive month, increasing by 0.4%. Core CPI, which excludes unstable factors such as food and energy, rose 0.2% in May, slightly lower than expected, causing the annual inflation rate to drop to 3.4%.

The latest data released last week also showed that the increase in employment in the United States in April was significantly higher than expected, indicating that the US economy is still in a very hot state.

The market expects the Fed to not begin cutting interest rates in the summer, but it may do so in September. According to CME's Fedwatch, the probability of a rate cut in September was 50% before the release of May inflation data. After the release of May inflation data, the probability increased to around 60%.

Kyle Chapman, a forex market analyst at Ballinger Group, said the data is unlikely to change the dot plot. However, he said the market should "naturally expect" that the data will be reflected in Powell's press conference. Chapman believes that Powell may be "especially lively".

The European Central Bank initiated the first interest rate cut in five years one week prior to the Fed's latest decision, kicking off the trend of major central banks cutting interest rates.

USD daily chart.

At 9:05 AM Beijing time on June 14, the US Dollar Index was reported at 105.27.