CICC: Fed May Pause Rate Hike in October, Act Again in December

36Kr reports that CICC's research note states U.S. September CPI rose 0.6% seasonally adjusted and 3.7% year-on-year; core CPI rose 0.3% and 2.6% year-on-year, both rebounding from last month and exceeding market expectations. Price increases came from a broad range of sources, with energy, core goods, and rents all contributing. High oil prices exacerbated energy inflation, while resilient consumption and AI investment demand supported commodity prices, and rent stickiness constrained the decline in service inflation. Regarding monetary policy, the CPI rebound reinforced the necessity for the Fed to continue raising rates, but given recent rises in U.S. Treasury yields and a stronger dollar, financial conditions have already tightened somewhat, suggesting the Fed may exercise patience. CICC expects the Fed to pause rate hikes in October but act again in December. However, a slowdown in the pace of rate hikes does not mean a shift toward loose monetary policy; over the next year, the Fed is likely to maintain a relatively tight policy stance.