*U.S. CPI Report – June 11, 2025: Inflation Cools Slightly, Markets React Positively* Today’s Consumer Price Index (CPI) report came in with a slightly cooler reading than markets expected — and investors welcomed the news. *Key Numbers at a Glance:* Headline CPI (May): +0.1% month-over-month (vs. +0.2% prior) Annual inflation: 2.4% (up slightly from 2.3%) Core CPI (excluding food & energy): +0.1% m/m | 2.8–2.9% y/y While inflation is still slightly above the Fed’s 2% target, the month-over-month slowdown signaled some relief. Energy prices fell by 1%, while food and shelter prices saw modest increases of 0.3% each. 📈 *Market Reaction: A Sigh of Relief* Markets took the report as a win. Here's how: S&P 500 and Dow futures edged higher shortly after the release, as traders priced in a more dovish Fed stance. Bond markets rallied, with the 10-year Treasury yield dipping to around 4.45%. The dollar softened, allowing EUR/USD to rise above 1.14. Even Bitcoin showed a slight uptick, reflecting broad-based market calm. 🏦 *What About the Fed?* Despite inflation ticking slightly higher on a year-over-year basis, core inflation remains sticky. This makes an immediate rate cut in June unlikely. However, markets are increasingly betting on rate cuts by September, with about a 60% probability priced in. The Fed now has more time to watch how shelter inflation evolves and whether the impact of tariffs begins to show in future prints. *What’s Next?* Markets will now shift focus to: U.S. PPI (Producer Price Index) Jobless claims and NFP trends The next CPI report on July 15 These will give clearer clues on whether the Fed will start trimming rates before Q4.