After the CPI data was released, the market further increased its bets that the Federal Reserve will raise interest rates at least twice by mid-2027.

A bout of inflation data is reshaping risk assets' rate assumptions.

Core CPI at 0.2% month-over-month means the Fed stays put, while 0.3% triggers a rate hike.

The current interest rate hike probability is around 50%, with benign inflation data potentially prompting a wait-and-see approach. However, the hawkish stance still introduces uncertainty into the future policy outlook.