CICC: U.S. inflation has not retreated, and the "quasi-stagflation" risk is still worth paying attention to

CICC's research report states that the U.S. August CPI adjusted month-on-month increased by 0.4%, year-on-year rising to 2.9%, and the core CPI increased by 0.3% month-on-month, up 3.1% year-on-year, in line with market expectations. In terms of components, driven by automobiles, core commodity prices rose by 1.5% year-on-year, the highest increase since May 2023, indicating that the core commodity sector has shifted from deflation to inflation from 2023 to 2024. The impact of tariffs on prices outside of automobiles is not significant, indicating that companies face resistance in passing on tariff costs. The slowdown in service inflation has also basically stagnated, with the significant rebound in weak airline ticket and hotel prices in the first half of the year being particularly noteworthy. Overall, this inflation data is not mild, but due to the continuous weakening of employment data, the Federal Reserve will have to lower interest rates first to respond. However, against the backdrop of supply contraction, the stimulating effect of interest rate cuts often manifests more as price increases rather than output expansion, which means that the space for interest rate cuts may be limited, and the risk of "stagflation" in the economy remains a concern