U.S. Treasury yields rebound after Federal Reserve cuts interest rates; next week's CPI data will determine the dollar's future trend.

【CoinPush】 Interestingly, the Federal Reserve cut interest rates as expected this week, sending out quite a few dovish signals, but the reality is more complex. Challenges in the AI sector are emerging one after another, leading to a divergence between the US stock market and the bond market—bond yields are actually rising. The 10-year U.S. Treasury yield jumped by 5 basis points this week, indicating that market expectations for the economic outlook are not purely optimistic.

Next week’s focus is quite intense. On Monday, Federal Reserve Board Member Mester and New York Fed President Williams will speak in turn, at 22:30 and 23:30 respectively; on Thursday, Atlanta Fed President Bostic will also give a speech. But the most critical data are two sets—Thursday at 21:30, the November CPI data (including annual and monthly rates, core and non-core), and the initial jobless claims released at the same time. On Friday evening, there will be the University of Michigan Consumer Sentiment Index and inflation expectations.

The most noteworthy among these is the CPI. Current data remains around 3%, exceeding the Federal Reserve’s 2% target. If next week’s CPI surprises to the downside and comes in lower than expected, it will further solidify the case for the Fed to cut rates, and the dollar may continue to be under pressure; but if the data is less favorable or even higher than expected, the trend will reverse. This single data point can significantly change the short-term direction of the dollar and will also have a direct impact on the entire crypto market.