Brothers just got off the plane, let's analyze tonight's market conditions, this might be very useful to you!
July's overall CPI inflation of 2.7% looks okay, and the drop in energy prices has helped a bit, but the core inflation data of 3.1% hides several key signals: first, sticky inflation cannot be suppressed at all; second, tariffs are starting to bite, and signs of companies passing costs onto consumers have already emerged; third, a 0.4% increase in income seems good, but if the money is spent on more expensive services, actual purchasing power may shrink.
The market's current rate cut expectations have surged to 90%, and U.S. stocks are getting restless, but I think the Federal Reserve is much more clear-headed than the market. The core CPI is still far from the 2% target, and this structural issue cannot be quickly resolved by rate cuts. Moreover, the transmission of tariffs has just begun, and if PPI shocks happen later, cost pressures will only become more severe.
In the short term, a rate cut in September is still highly probable, but don't expect massive easing; it is more likely to be a tentative move of 25 basis points. The real risk lies in the combination of economic slowdown and inflation stagnation in the months to come, which will be very difficult to handle.
That's all for today, just returned from a business trip, and the recent research on Shen Dan is still mainly internal; friends who just saw this should pay more attention.
