Analysts: June inflation data supports the view that the market overestimates the possibility of a Fed rate hike

On July 14, SignatureFD's Tony Welch said the market had overestimated the possibility of the Fed raising interest rates. Futures markets reflected a low probability of raising interest rates this month after weak CPI inflation data was released in June, but according to CME data, a rate increase at least once this year is still possible. Welch said that no matter how volatile fuel prices fluctuate, inflation is trending downward. "We just don't see the kind of wage growth that can support broad-based inflation across the economy in the long term," he said. He expects Fed Chairman Walsh to try to keep inflation expectations near the Fed's 2 percent target. "I do think he is trying to use his rhetoric to help set and keep inflation expectations stable," he said.