International Forex News - August 13

CICC: U.S. Inflation May Have Entered a New Phase, with Inflation Persistence Likely to Lengthen

On August 13, a CICC research report stated that U.S. July CPI rose 0.1% month on month after seasonal adjustment and 3.4% year on year, while core inflation rose 0.2% month on month and 2.5% year on year, all in line with market expectations. Energy prices continued to fall, but international oil prices have risen again since August, increasing uncertainty over future energy prices. In core inflation, goods prices were relatively strong while services were relatively weak. In particular, prices of information technology products such as computers and software continued to rise, reflecting that the supply-demand mismatch caused by expanding AI capital expenditure is gradually transmitting to the consumer side. We believe U.S. inflation may have entered a new phase, with its drivers gradually shifting from supply shocks such as tariffs and oil prices toward demand expansion brought by AI investment. Inflation persistence may therefore lengthen. For the Federal Reserve, this data eases short-term rate hike pressure, but compared with supply-driven inflation, demand-pull inflation requires greater attention from policymakers.

Probability of the Fed Keeping Rates Unchanged in September Stands at 59.9%

On August 13, according to CME FedWatch: the probability that the Federal Reserve will keep interest rates unchanged in September is 59.9%, while the probability of a cumulative 25 bp rate hike is 40.1%. By October, the probability that the Fed will keep rates unchanged is 45.3%, the probability of a cumulative 25 bp rate hike is 44.9%, and the probability of a cumulative 50 bp rate hike is 9.8%.