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

ChainThink report, October 27, China International Capital Corporation (CICC) research report stated that the US seasonally adjusted CPI rose by 0.3% month-on-month in September, and year-on-year increased to 3.0%, with core CPI rising 0.2% month-on-month and 3.0% year-on-year, below market expectations.

Looking at the components, rent and used car prices showed a more noticeable drag, reflecting weaker demand in related areas. This is speculated to be related to Trump's policies restricting and expelling immigrants. The prices of goods affected by tariffs showed mixed changes, but the speed and magnitude of price increases were lower than our previous expectations.

This also reflects weak end-demand, making it difficult for businesses to pass on tariff costs to consumers. Service inflation remains resilient. Overall, this inflation data is relatively moderate, supporting the Federal Reserve in continuing to cut interest rates. Given the downward risks in the labor market, we expect the Federal Reserve to cut interest rates by 25 basis points in October and December respectively. (Jin10)