Traders are adjusting their expectations for Federal Reserve monetary policy following the release of December's Consumer Price Index (CPI) data. The latest market sentiment indicates that traders are now pricing in a potential rate cut by July, a shift from previous expectations that anticipated a cut in September. Additionally, U.S. Treasury yields have declined, with the 10-year yield falling by 6.9 basis points to 4.722%. U.S. stock index futures have responded positively, rising by more than 1%, while Russell 2000 futures surged by 2%. This market reaction reflects growing optimism regarding the Fed's potential easing of monetary policy in response to the inflation data.