US July CPI lower than expected, ETH approaching historical highs, market follows Jackson Hole annual meeting.

On August 13, according to Daily Market Watch, the U.S. July CPI (consumer price index) rose 2.7% year-on-year, lower than the market expectation of 2.8%; the core CPI rose 3.1% year-on-year, slightly above the expected 3.0%. The relatively moderate overall inflation reading has reinforced expectations for the Fed to begin a rate cut cycle in September, with most market participants currently expecting a 25 basis point cut. Previously anticipated to rise due to businesses passing higher costs onto consumers, commodity inflation instead performed below expectations.

After the data was released, the market's expectations for rate cuts in 2025 remained unchanged, with pricing still reflecting a cut space of about 60 basis points. Although the labor market is softening, and the market expects a more dovish Fed chair in 2026, the terminal rate remains stable. Futures positions indicate that investors believe the Fed's rate floor in 2026 will be around 3%.

With several key risk events materializing, US stocks continue to rise and hit new historical highs. In terms of tariff confrontations, "TACO" remains a core reference for traders, as the extension of tariffs between the US and China has been prolonged by 90 days. The geopolitical situation between Ukraine and Russia has eased, and the risk of escalation is viewed as a distant possibility; a ceasefire or peace agreement has become the baseline scenario for the market.

In the cryptocurrency market, long-term holders of ETH are finally experiencing a surge of excitement, as the price of ETH approaches its historical high. The financing conducted by a certain platform to establish an ETH treasury has attracted attention. The market points out that, compared to Bitcoin, any capital inflow into ETH has a more pronounced impact due to ETH's smaller market capitalization and slightly thin liquidity. As long as funds continue to flow into ETH DAT (Decentralized Asset Token), the current upward momentum of ETH is expected to be sustained.

Looking ahead, the Jackson Hole annual meeting will become the next focus. Fed officials are expected to signal a 25 basis point rate cut in September during the meeting. Before the September FOMC meeting, there is only one CPI and one non-farm payroll data release left, and it is believed that these data are unlikely to significantly alter the Fed's decision.