The U.S. economy may see a reduction in interest rates in the coming months, as the latest inflation report suggests consumer price changes are aligning with the Fed's 2% target. In June 2024, the inflation rate dropped to 3% year-over-year, prompting increased bets on a September rate cut. This led to a rally in interest-rate-sensitive assets, with Treasury yields falling and low-yield currencies strengthening. Gold prices surged, while the stock market experienced a decline, with real estate stocks performing well. Homebuilders saw significant gains, reflecting investor response to the shifting rate expectations. Overall, the market is reacting positively to the potential for lower interest rates, with investors flocking to assets traditionally favored in a low-rate environment.