Analysis: The Fed may cut interest rates by 25 basis points in October and December.

On October 27, a report from CICC stated that the U.S. September CPI seasonally adjusted rose by 0.3%, year-on-year increased to 3.0%, and the core CPI rose by 0.2% month-on-month, year-on-year increased by 3.0%, which is lower than market expectations. From the breakdown, rental prices and used car prices are particularly dragging down, reflecting weakened related demand. It is speculated that this is related to Trump's policies of restricting and expelling immigrants. The prices of goods affected by tariffs are fluctuating, but the speed and magnitude of their price increases are lower than our previous expectations. This also reflects weak terminal demand, making it difficult for companies to pass on tariff costs to consumers. Service inflation remains strong. Overall, this inflation data is relatively mild, supporting the Fed to continue cutting interest rates. Given the downward risks in the labor market, we expect the Fed may cut rates by 25 basis points in October and December, respectively. ( Jin10 )