BitUnix analyst: Market trading is not just about low inflation, but about repricing policy credibility According to BlockBeats, on July 15th, the June CPI in the United States was significantly lower than market expectations, with the overall CPI falling to 3.5% year-on-year and the core CPI slowing down to 2.6% year-on-year, marking the first negative growth since 2020. The market immediately lowered its expectations for a year-end interest rate hike, driving the US stock market, gold and cryptocurrency markets to rebound simultaneously, and Bitcoin also approached $65000 at one point. If it can firmly stand at $64000 in the future, the rebound momentum is expected to continue further. However, the cooling of inflation this time is not due to overall weak demand, but is driven by the 5.7% drop in energy prices and the 9.7% drop in gasoline prices in a single month, which has rapidly cooled overall inflation. On the other hand, housing, food, and service prices continue to maintain positive growth, indicating that although the core price pressure has improved, it has not completely disappeared. If the situation in the Middle East pushes up energy prices again, inflation may still regain support in the coming months, so the market will not completely rule out the possibility of inflation fluctuations based solely on monthly data. It is worth noting that Federal Reserve Chairman Walsh did not change his stance in congressional testimony due to the cooling of CPI, still emphasizing "zero tolerance" for persistent inflation, and stated that interest rates and balance sheet tools remain within policy options, while initiating five reform studies including AI, productivity, balance sheet, and policy framework. This indicates that the Federal Reserve is downplaying forward guidance and is more inclined to adjust policies based on actual data rather than disclosing policy direction to the market in advance. The importance of every economic data will further increase in the future. On the other hand, the situation in the Middle East continues to escalate. The US military has resumed its maritime blockade against Iran, and both sides continue to make tough statements. At the same time, the US is pushing for the restart of the Iraq Syria oil pipeline, hoping to reduce global dependence on the Strait of Hormuz. This indicates that energy supply is gradually developing towards a diversified layout, but until alternative transportation routes are fully established, the energy market will still maintain a high risk premium, which also creates some uncertainty in the speed of inflation improvement. In addition, the Japanese market also deserves continued attention. The US dollar against the Japanese yen has once again returned to 162, and the market has begun to reconsider the accumulated risks of yen carry trade. If the Bank of Japan raises interest rates, intervenes in the foreign exchange market, or the US dollar falls due to weak economic data in the future, it may prompt arbitrage positions to quickly close, further increasing the short-term volatility of global technology stocks and high-risk assets. Overall, the CPI has brought about a recovery in market sentiment, rather than a complete release of risks. Next, the market will simultaneously focus on three main themes: whether inflation can continue to improve against the backdrop of a rebound in energy prices, whether the Federal Reserve will continue to maintain its data dependent policy model, and whether there will be structural changes in the flow of funds to Japan. Against the backdrop of continued interdependence between policies, geopolitics, and global liquidity, the volatility of risk assets is expected to remain relatively high.