Forecast for US CPI in the coming week and core observation points along with some personal views do not constitute investment advice:
🌎 I. US CPI Forecast (July data to be released soon)
Release time of key data
July CPI data: To be released on August 12 at 20:30 Beijing time, with the market highly focused on its month-on-month turning point signal.
Core Expectations
Year-on-year rebound: July CPI is expected to rise from 2.7% in June to 2.8%, with core CPI returning to above 3.0% (previous value 2.9%).
Month-on-month acceleration: Core CPI month-on-month increase may reach 0.3%-0.4%, hitting a 6-month high. The main reason is the effective transmission of tariffs (such as second-hand car prices turning from decline to increase) and the upward adjustment of true inflation after statistical model corrections.
Driving Factors
Deepening tariff impacts: An average tariff rate of 18.4% has caused prices of goods with high import dependency (clothing, home appliances) to surge, and tariffs on intermediate goods may trigger sustained inflation.
Statistical deviations fading: Previously, the seasonal adjustment model underestimated inflation by nearly 20bp, and data from July onward more accurately reflects price pressures.
⚠️ III. Policy and Market Impact
Federal Reserve Rate Cut Path
If inflation rebounds beyond expectations, it may disrupt the current market's optimistic expectations for a rate cut in September. The Federal Reserve may fall into a 'stagflation dilemma': economic growth slows but inflation rises, creating uncertainty in the pace of rate cuts.
China's Policy Response
Insufficient domestic demand remains the core contradiction, with policies mainly focused on 'supporting without lifting' and emphasizing the implementation of existing measures (such as promoting consumption and stabilizing real estate), with low probability of incremental stimulus.
Asset Insights
US stocks and bonds: Inflation rebound may trigger volatility; recommend underweighting US stocks; US bonds face short-term pressure but still hold long-term allocation value under recession expectations.
Gold and Chinese assets: Safe-haven attributes support gold; Chinese technology stocks related to new productivity (such as AI and high-end manufacturing) benefit from policy dividends, highlighting their allocation value.
💎 Summary: Core observation points for CPI in the coming week
Economic Entity Time Forecast Value Key Drivers Potential Impact China (August) CPI year-on-year -0.4% to be released in early September, food drag, energy constraints limit policy easing; US (July) Core CPI month-on-month 0.3%-0.4% on August 12 at 20:30, tariff transmission, statistical adjustments; Federal Reserve's probability of a rate cut in September fluctuates.
📌 Reminder: If the US July CPI data confirms a month-on-month turning point, it may trigger a repricing of global assets. It is recommended to closely monitor the statements of Federal Reserve officials and the progress of China-US trade negotiations after the data is released.