A highly anticipated key data from the global market has finally been released!

On the evening of July 11th, the U.S. Department of Labor announced the latest figures, showing that the U.S. CPI increased by 3% year-on-year in June, lower than the expected 3.1%, and declined by 0.1% month-on-month, marking the first negative growth in nearly four years.

Among them, the core CPI rose by 3.3% year-on-year, lower than the expected 3.4%, reaching the lowest level in nearly three years.

The new low in CPI data, combined with the recent "revision" of non-farm data, has once again increased expectations for a Federal Reserve interest rate cut, with many institutions believing that the probability of a rate cut by the Fed in September exceeds 80%.

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Following the release of the latest U.S. CPI data, the U.S. stock market plummeted, with the market value of the seven major U.S. technology giants evaporating by $600 billion overnight.

Tesla fell by 8%, Nvidia fell by more than 5%, and the other tech giants all fell by more than 2%.

The U.S. stock market's sharp decline is due to the rising expectations of a Fed rate cut.

The U.S. stock market has been setting new highs in the past two years, precisely because of the aggressive interest rate hikes in the U.S., attracting global capital backflow, maintaining high interest rates, which is the important foundation for supporting the U.S. stock market.

Coupled with the U.S.'s continuous promotion of AI artificial intelligence, global capital has been frantically buying into tech giants like Nvidia and Microsoft.

Now that the U.S. is likely to cut interest rates, this signal is continuously being released, and the U.S. tech giants are the first to support the decline, leading the way.

In addition, the yield on the U.S. 10-year Treasury bonds fell by 10 basis points, the U.S. dollar index plummeted, and gold prices soared.

Once the Fed starts to cut interest rates, the U.S. dollar exchange rate will inevitably fall, and the U.S. dollar index will continue to decline.

The EU and Canada have already taken the lead in cutting interest rates, and now it's waiting for the U.S.

The Fed is in a dilemma.

At a critical moment, Japan launched a "surprise attack".

Just after the U.S. CPI data was released, the yen exchange rate appreciated slightly, then rose sharply by 2%, starting a significant appreciation, with the exchange rate rising from the 162 range to the 158 range.

The Bank of Japan intervened, fiercely counterattacking the Wall Street capital that had previously harvested the yen.

Taking advantage of the increased expectations for a U.S. rate cut and the weakness of the U.S. dollar, the Bank of Japan took action, wildly crushing the U.S. dollar short positions, and massively selling U.S. dollars and Treasury bonds, causing the yen exchange rate to quickly appreciate in the short term.

Subsequently, the Bank of Japan also frankly admitted that it had indeed intervened in the yen exchange rate in the foreign exchange market, estimating that Yellen would be so angry that she would want to issue another warning.

After all, Yellen has repeatedly warned Japan not to intervene in the exchange rate, not to sell U.S. Treasury bonds, unless the U.S. agrees.

So, it can be imagined what the U.S. will do next?

Can Japan escape the fate of being ruthlessly harvested by the U.S. dollar?

In April of this year, Japan sold more than $30 billion in U.S. Treasury bonds, which was when the Bank of Japan was dealing with the sharp depreciation of the yen exchange rate, and the sharp depreciation of the yen exchange rate was caused by the Wall Street capital's crazy short selling of Japan, using the huge interest rate difference between the U.S. and Japan to continuously short sell the Japanese economy.

The Bank of Japan then used nearly 10 trillion yen (equivalent to more than $60 billion) for intervention.

In the short term, the yen exchange rate rose again, but the good times did not last long.

By June, the yen exchange rate fell back to the level of April, or even fell more, and the previous intervention by Japan at a cost of 10 trillion yen failed.

This time, Japan took advantage of the weakness of the U.S. dollar and intervened again, launching a surprise attack on Pearl Harbor in dollars.

At this time, intervention can reduce costs and consume less foreign exchange and funds, trying to boost the yen in this way.

However, the fate of the yen will not change because of such a surprise attack.

Since the U.S. raised interest rates in 2022, the largest exchange rate decline has been the yen.

Japan has been ruthlessly harvested by the U.S. dollar many times.

Not long ago, Japan was also included in the "exchange rate manipulation country" list by the U.S., so it will not be surprising how the U.S. will harvest Japan next.

The embarrassing thing is that the harvest link of the U.S. dollar tide is now stuck.

After such a long period of aggressive interest rate hikes, there has been no large economy to fill its huge debt hole, and there has been no successful harvest.

How can it easily lower interest rates?

Although the market now firmly believes that the Fed will cut interest rates in September, the Fed's operations have always been unexpected, so there is still a lot of uncertainty about when the Fed will cut interest rates.

However, judging from the data currently released, the decline in the U.S. economy is also beyond expectations.

U.S. AAA-level financial products announced a blowout last month, which is the first time since the 2008 financial crisis.

If high interest rates continue to be maintained, a series of blowouts in the U.S. may be about to begin.

Coupled with the long-term U.S. Treasury bond auction being bleak, almost encountering a situation where no one cares, and the U.S. federal annual debt interest has exceeded $1.1 trillion, U.S. Treasury bonds are facing a deteriorating situation.

Therefore, the probability of the Fed cutting interest rates within the year is still very high, and high interest rates cannot be sustained for too long.