CICC: Fed’s need to accelerate rate hikes is not strong; maintain call for a 25bp hike in December

Odaily 星球日报讯 CICC research report says that US October CPI rose 0.4% month-on-month on a seasonally adjusted basis (0.6% last month), while core CPI rose 0.3% (0.3% last month), both above market expectations. Overall, inflation stickiness remains strong, with core CPI rising 0.3% month-on-month for the third consecutive month, supporting the Fed’s continued rate hikes. Recently, Fed Governor Waller said a 50 basis point hike in December cannot be ruled out. However, we believe the Fed’s policy has not clearly fallen “behind the curve,” and given that financial conditions have already tightened marginally, the need to accelerate rate hikes is not strong. We maintain our baseline judgment of a 25 basis point hike in December, and the pace of this tightening cycle remains gradual and moderate. (Jinshi)