CICC: The current market may be too aggressive in pricing in the Fed rate cut.

On August 15th, Jin10 Data reported that according to CICC research, overall, the slowdown of US inflation is progressing as expected by the market. In terms of sub-items, the rebound in the month-on-month inflation rate in July is mainly driven by rent, indicating that price stickiness still exists, and the slowdown of inflation will be gradual. We believe that this data supports a 25 basis point rate cut by the Federal Reserve in September, but does not support a larger rate cut. Our benchmark scenario assumes that the Federal Reserve will cut interest rates by 25 basis points in both September and December. Currently, the market's pricing for rate cuts may be too aggressive.