U.S. inflation remains stubborn, traders continue to bet on a rate cut in July.

On March 28, data showed that in February, the Federal Reserve's preferred inflation indicator continued to rise at a stubborn pace, while the personal spending month-on-month rate fell short of expectations, indicating that household demand was weaker than anticipated. This suggests that consumers are becoming more cautious amid growing concerns about financial conditions. Following the data release, stock index futures dropped further, and Treasury yields remained low. Swap traders continue to anticipate two rate cuts of 25 basis points each this year, with the first cut expected in July. Today's report indicates that inflation is stubbornly persistent, and the tariffs proposed by Trump could potentially exacerbate price pressures. His aggressive trade policies have already dampened confidence among businesses and consumers, coupled with signs of increasing financial pressure on households, raising concerns about the economy potentially slipping into stagflation or even recession. ( Jin10 )