The latest released data shows that the core Consumer Price Index (CPI) in the United States increased by 3.1% year-on-year in July, which not only exceeded the previous increase of 2.9%, but also surpassed the market's general expectation of 3.0%, reaching a new high in nearly five months. The sudden rebound of this key inflation indicator clearly indicates that the underlying inflationary pressures in the United States have not gradually eased as expected, but instead present a trend that is difficult to reduce, completely breaking the previous market's optimistic expectation of a continued slow decline in inflation.

After the data was released, the market's expectations for the Federal Reserve to possibly drop interest rates in September have almost completely dissipated. The current level of inflation still has a significant gap from the 2% policy target, and its persistence far exceeds expectations. This means that the Federal Reserve is unlikely to begin a rate drop cycle in the short term; instead, it may need to extend the high interest rate policy for a longer period, and the possibility of raising interest rates again in the future cannot be ruled out.

This inflation data could have a significant impact on the global financial markets:

1. The US dollar may find strong support and show a clear strengthening trend.
2. The yield on U.S. Treasury bonds, especially short-term Treasury yields, is expected to rise significantly.
3. The US stock market may face significant pressure, especially technology stocks that have risen sharply in the past and are sensitive to interest rate changes may be the hardest hit.
4. Non-interest-bearing assets such as gold may also be adversely affected.

This inflation report undoubtedly poured cold water on the market's expectations for a policy shift, abruptly halting the Federal Reserve's potential easing policy outlook. Global financial markets need to reassess interest rate trends and asset pricing, and market volatility may intensify. In the face of a rapidly changing market environment, investors need to conduct careful analysis and seize key opportunities.

However, we also need to note that a single data point cannot fully represent economic trends. The direction of inflation data in the coming months will be more crucial, as it will more clearly show whether inflation has really begun to rebound or if it is merely a short-term fluctuation. At the same time, the performance of the job market, consumer confidence index, and other economic indicators will also impact the Federal Reserve's policy decisions.

For investors, it is essential to remain calm at this time and avoid overreacting. A diversified investment strategy, focusing on long-term economic fundamentals, and closely monitoring changes in various economic indicators will help make more informed investment decisions in this uncertain market environment.