BOND TRADERS MAINTAIN FED RATE HIKE BETS AFTER US CPI DATA

US Treasury prices strengthened slightly after core inflation data for May came in below forecast. Bond traders retained their bets that the Federal Reserve will raise interest rates before the end of the year. The consumer price index report showed core inflation accelerated at a slower pace than analysts had expected. Markets interpreted the figures as leaving the Federal Reserve's rate path broadly intact.

Precious metals and bitcoin fell as traders increased their bets on a Federal Reserve rate hike. Gold and silver moved firmly into negative territory following the release of the inflation data. Concerns about inflation and the Federal Reserve's interest rate trajectory weighed on investor sentiment across multiple asset classes. The simultaneous moves across bonds, metals, and cryptocurrency reflected a broad market reassessment of monetary policy expectations.

The May CPI report has reinforced the prevailing expectation among bond traders that the Federal Reserve will act on interest rates within the year. Treasury markets absorbed the data without significant volatility, with the modest strengthening in prices reflecting relief that inflation did not accelerate faster than expected. The Federal Reserve has not yet confirmed its next policy decision. Investors across bond, commodity, and digital asset markets are now watching closely for further signals from Federal Reserve officials on the timing and scale of any rate adjustment.