*Post CPI* 📉 CPI Overview • May CPI rose just +0.1% MoM (expected +0.2%); YoY CPI at +2.4%, slightly below forecasts of +2.5% . • Core CPI also +0.1% MoM and +2.8% YoY, softer than projections . ⸻ 💵 Immediate Dollar Reaction • U.S. Dollar index (DXY) dropped approximately 0.2%–0.4% on the day . • Treasury yields fell ~4–6 bps, with the 10-year yield dropping to around 4.43% . ⸻ 🏦 Implications for the Fed & Market Sentiment • Softer CPI gives the Fed more room to pause rate increases and potentially consider rate cuts later this year . • Markets are now pricing in roughly two rate cuts by September, supported by the dovish inflation outlook . ⸻ 💡 Conclusive Summary • Dollar Weakness Confirmed: With inflation softer than expected, the USD is under downward pressure. • Lower Yields Signal Lower USD Sentiment: Treasury yields falling reinforces the backdrop for a weaker greenback. • Gold-Friendly Environment (XAU/USD): A softer dollar and dovish Fed outlook boost gold’s appeal in the near term. ⸻ ✅ Bottom Line • CPI Surprise: Cooler inflation — USD and yields dropped. • Fed Outlook: Opened the door to cuts later this year, reinforcing the U.S. dollar’s weakness. • Trader Edge: Watch for continued USD softness—favorable for gold and commodity-linked currencies.