Huatai Securities: Maintains the judgment of the Federal Reserve cutting interest rates in September and December.

Huatai Securities stated that looking ahead, the transmission of tariffs may further push up core commodity inflation, but considering the potential slowdown in the job market, we maintain our judgement that the Fed will cut interest rates twice in September and December. The June CPI data shows that inflation of imported goods, which are highly reliant on imports, has already rebounded, refuting the argument that overseas exporters have lowered prices and that tariffs have not transmitted. Considering that the weighted average tariff rate on imports in the United States was only 8.7% in May, and some companies have delayed the transmission of prices by consuming inventory, looking ahead, we expect that the transmission of tariffs to inflation will become more evident, possibly boosting inflation in the United States in the short term. The survey by the New York Fed also corroborates this, with 88% of manufacturing companies and 82% of service companies choosing to transmit tariffs to consumers within 3 months. At the June FOMC press conference, Powell stated that the Fed needs to observe the impact of tariffs during the summer, and the rebound in inflation may already be within the Fed's expectations.