Guotai Haitong: US inflation continues to be mild, concerns about interest rate hikes temporarily eased.

Guotai Haitong published a research report stating that the U.S. inflation data for July met expectations, with a structural characteristic of stronger goods and stable services, which somewhat alleviated market concerns about a Federal Reserve rate hike in September. Currently, U.S. inflation continues to be moderate, but attention must be paid to the potential disruption caused by oil prices and resilient demand on the inflation downturn. If the inflation data for August does not show unexpected strength and U.S. employment maintains low job growth, the Federal Reserve's wait-and-see window may be further extended, and it is still possible to keep interest rates unchanged in September. Guotai Haitong's main viewpoints are as follows: July Inflation: Moderately eased as expected. In July, the U.S. CPI fell to 3.4% year-on-year and rose to 0.1% month-on-month. Core CPI remained at 2.5% year-on-year and increased to 0.2% month-on-month, both in line with market expectations, maintaining a moderate overall trend. Among these, the energy category continued to show negative growth month-on-month, but due to the impact of the escalating U.S.-Iran conflict causing a secondary rebound in oil prices, the decline has significantly narrowed compared to June. Core Inflation: Stronger in goods, stable in services. Most core goods showed an increase in month-on-month growth. First, the automotive category, as a mainstay of core goods, rebounded month-on-month, especially the used car segment, which saw a significant increase. Second, besides the automotive items, categories such as furniture, clothing, and education/communication goods also experienced a month-on-month rebound. Overall, excluding used cars, the month-on-month growth rate of core goods rose to about 0.2%, reversing the relatively weak trend since the second quarter. In contrast, core services inflation remained moderate overall. The housing segment saw a slight month-on-month increase, still within a moderate growth range. Excluding the housing segment, the core services month-on-month growth rate rose by 0.2 percentage points to 0.2%, with no signs of overheating. Notably, the rise in airfares in July contributed to the month-on-month growth in transportation services. Medical and educational communication services also experienced a rebound month-on-month, but the extent remained relatively controllable. Federal Reserve: The wait-and-see window is expected to be further extended. Current U.S. inflation continues to be moderate; however, future potential upward risks to inflation need to be monitored: First, if oil prices rise again due to disturbances in the U.S.-Iran situation, this may disrupt the pace of inflation decline; Second, if U.S. demand remains resilient and AI capital investment continues to expand, caution is needed regarding the demand side's impact on core U.S. inflation. In the short term, the inflation data in line with expectations has alleviated concerns about a Federal Reserve rate hike in September. The next inflation data before the September meeting will still have a significant impact on market sentiment and the Federal Reserve's monetary policy. If the inflation data for August continues to show a moderate trend and the U.S. job market maintains low job growth, the Federal Reserve's wait-and-see window may be further extended, and it is still possible to keep interest rates unchanged in September. Risk Warning: The ongoing stalemate in the Iran situation causing a secondary rebound in oil prices and a more hawkish tendency of the Federal Reserve exceeding expectations.