CICC: Inflation exceeds expectations, urgency for Fed to cut interest rates decreases

The CICC Research Report pointed out that the U.S. CPI increased by 3.4% year-on-year in December (previous value: 3.1%), and the core CPI increased by 3.9% year-on-year (previous value: 4.0%), both higher than expected. We believe that the general direction of U.S. inflation is still slowing down, but there is great uncertainty in the pace, which means that the Fed's monetary policy will be full of variables. If the Fed turns to easing too early, it may lead to a rebound in already good demand and increase the risk of economic "non-landing" and "secondary inflation." As a result, investors should be more cautious about interest rate cut expectations. The Federal Reserve may not cut interest rates in March as the market hopes, and the expectation of six interest rate cuts throughout the year may also be too aggressive. (Golden Ten)