Tiger'sRichesRush| U.S. inflation may be disappointing in April, which may put pressure on the U.S. dollar!

Huitong Financial App News-- 20:30, Wednesday, May 15, Beijing timeTiger'sRichesRushThe United States will release the April CPI report. This is an important economic report closely watched by market participants and is likely to exacerbate market volatility because of its importance to the Fed's monetary policy path.

Market analyst DiegoColman said the upcoming April inflation figures were also likely to be disappointing after the rise in PPI data on Tuesday, undermining confidence in the deflationary trend.

General estimates show that overall US CPI rose by a seasonally adjusted 0. 5 per cent in April.Tiger'sRichesRush.4%, reducing the annual growth rate slightly from 3.5% to 3.4%. Meanwhile, core CPI is expected to climb 0.3 per cent, bringing 12-month CPI down to 3.6 per cent from 3.8 per cent in March.

Although the Fed has hinted that it may wait longer than originally thought to start tightening policy restrictions, it is not entirely hawkish, and Powell largely ruled out new interest rate hikes. However, another upside surprise in the data could change the FOMC's position and lead it to take a more aggressive stance.

In the face of hot inflation data, the market may realise that the recent series of strong CPI data are not just seasonal anomalies or temporary setbacks, but are part of a new trend: the cost of living is accelerating again and stabilizing at higher levels.

The situation described earlier could lead traders to reduce their bets on a September rate cut, turn their attention to possible actions in December, or not cut rates at all in 2024. A longer period of high interest rates should put upward pressure on yields, boosting the dollar. This should be bad for the price of gold.

On the other hand, mild inflation reports that fall short of Wall Street expectations should put pressure on bond yields and the dollar, creating a favourable backdrop for precious metals. Such an outcome could revive anti-inflationary hopes and increase the likelihood that the Fed will shift to a looser stance in early autumn.

Daily chart of dollar index 10:45 on May 15, Beijing time, the dollar index was at 104.97