Zheng Quan Shi Bao Wang·2025-08-13 00:29Core Viewpoint - Huatai Securities maintains the judgment that the Federal Reserve will implement its first interest rate cut in September and will lower rates twice within the year [1] Inflation and Tariffs - July inflation data in the U.S. indicates that the transmission of tariffs to inflation is relatively mild [1] - Research by Cavallo et al. shows that after tariffs are announced, the maximum increase in commodity prices occurs within 10-15 weeks (3-4 months) [1] - Due to weak perceived demand, companies only pass on 50-60% of the tariff pressure to consumers, preventing a larger increase in inflation [1] Future Outlook - With an expected increase in tariffs in August, core inflation may continue to rise moderately [1] - Weak corporate demand and a weakening labor market will constrain the extent of inflation increases [1] - The slowdown in demand and accelerated deportation of illegal immigrants suggest that the labor market will continue to face pressure in the third quarter [1]