中金：Maintains Baseline Forecast of No Rate Hikes for the Rest of the Year, But the Bar for a Hike Has Lowered

Odaily reported that according to a research report by CICC, the US CPI fell by 0.4% month-on-month in June, with the year-over-year increase slowing to 3.5%; core CPI was flat month-on-month and rose 2.6% year-over-year, both figures coming in below market expectations. The decline in energy prices was the main reason for the cooling inflation. Looking ahead, the situation between the US and Iran has escalated again, introducing uncertainty into the energy inflation outlook. At the same time, the inflationary effects of AI are gradually emerging, with upstream hardware supply-demand mismatches, price increases for software and peripheral products, and AI capital expenditures boosting aggregate demand, all of which could make core inflation more sticky.

In terms of policy, the cooling inflation in June supports the Fed maintaining the current interest rate at its July meeting. However, recent statements by Waller indicate that the Fed is reassessing the possibility of a "preventive rate hike." We maintain our baseline forecast of no rate hikes for the rest of the year but note that the bar for a hike has already lowered. Should one or two overheated inflation data points emerge, it could prompt the Fed to further discuss rate hike options. (Jin Shi)