Core Insights - The U.S. Congressional Budget Office (CBO) has revised its economic growth forecast for 2025 down to 1.4% from an earlier prediction of 1.9%, while also increasing inflation and unemployment rate forecasts [3] - The inflation rate is now expected to rise to 3.1%, up from the previous estimate of 2.2% [3] - The unemployment rate is projected to reach 4.5% by the fourth quarter of 2025, higher than the earlier forecast of 4.3% [3] Economic Conditions - Recent reports indicate that the U.S. economy may be entering an early stagflation phase, characterized by simultaneous economic growth slowdown and rising prices [5] - The Consumer Price Index (CPI) rose by 0.4% in August, leading to an annual inflation rate of 2.9%, the highest level since January [7] - Initial jobless claims surged to a four-year high, with approximately 263,000 people filing for unemployment insurance in the week ending September 6 [7] Federal Reserve Response - Signs of stagflation are becoming increasingly evident, and the Federal Reserve currently lacks an ideal response strategy [9] - The Federal Reserve is set to hold a policy meeting on September 16, with market attention focused on potential interest rate cuts due to recent labor market weakness [9]