Group 1 - The core viewpoint of the report is that the preference for duration in the market has increased, particularly for fixed-rate preferred stocks, due to a shift in the U.S. Treasury market dynamics [2][4]. - The report highlights that the demand for $25 fixed-rate preferred stocks has reached a nine-month high, surpassing the demand for $1,000 floating-rate preferred stocks, with the former rising by 2.9% in the second half of the year compared to a 0.9% increase for the latter [4][8]. - The report indicates that despite the rising demand and yields, $25 preferred stocks remain cheaper than $1,000 preferred stocks, with a spread of approximately 63 basis points, which is in the 84th percentile since 2012 [8]. Group 2 - For cautious investors, the report suggests focusing on older $1,000 preferred stocks, which have lower yields but shorter durations and lower interest rate sensitivity, providing a yield premium of over 100 basis points compared to investment-grade bonds [14]. - The report notes that the average back-end spread for newly issued preferred stocks in 2025 is only 275 basis points, the narrowest on record, indicating a potential increase in extension risk [14][17].

Inflation Trends - The U.S. July CPI growth rate slightly decreased to 0.20% month-on-month from 0.29% in June, primarily due to falling energy prices, while the year-on-year CPI growth remained at 2.7%[6] - Core CPI month-on-month growth increased from 0.23% in June to 0.32% in July, exceeding market expectations of 0.29%, with year-on-year growth rising from 2.9% to 3.1%[6] Market Expectations - Following the CPI data release, market expectations for a rate cut in September rose from 86% to 94%, with an anticipated total cut of 60 basis points for the year[1] - The Federal Reserve is expected to maintain interest rates in September, with potential cuts in October and December[1] Core Inflation Components - Core goods prices remained stable month-on-month, while core service prices saw a significant rebound, with core services month-on-month growth rising from 0.21% to 0.48%[6] - Rent, which accounts for nearly 35% of the CPI, saw a month-on-month increase of 0.27%, returning to pre-pandemic levels[6] Employment and Economic Outlook - Non-farm employment growth has recently declined, influenced by both demand slowdown and reduced immigrant labor supply, while the unemployment rate remains low historically[1] - The inflation rate is expected to rebound in August and September, with projections indicating a year-on-year CPI growth of 2.9% to 3%[6]

Inflation Trends - The core CPI in the US rose by 0.1 percentage points to 3.0% year-on-year in July, with a month-on-month increase of 0.32%, marking the second-highest rise since April 2024[3] - Core durable goods prices increased significantly by 0.36% month-on-month, while energy prices fell by 1.07%, indicating the impact of elevated tariff rates on goods inflation[4] - The labor market's cooling has not significantly affected inflation, as average hourly wages rebounded, sustaining the wage inflation spiral[4] Federal Reserve Policy Implications - The strong rebound in core inflation may limit the Federal Reserve's ability to cut interest rates, as maintaining a long-term inflation target of 2% becomes challenging[5] - The ongoing high tariff rates, ranging from 10% to 41%, are expected to further influence the core CPI in the coming months as trade agreements are finalized[5] - The anticipated effects of large-scale tax cuts for residents and businesses have yet to materialize, suggesting that inflationary pressures may persist[5] Economic Outlook - The current economic cycle is likely to remain heated, with potential upward pressure on core inflation due to a tighter labor market and rising wage growth[5] - The divergence in monetary policy among major developed economies may lead to a rebound in the US dollar index as it adjusts to real interest rate differentials[5] - Risks include the possibility that the Federal Reserve's interest rate cuts may not meet expectations, which could constrain monetary easing in other countries[6]

Core Viewpoint - The article indicates that the U.S. inflation is entering a structural upward phase, with core CPI rebounding to over 3%, moving further away from the Federal Reserve's 2% target, which may increase internal disagreements within the Fed regarding policy decisions [2][5][6]. Inflation Data Summary - In July, the core CPI adjusted month-on-month increased by 0.3%, and year-on-year rose from 2.9% to 3.1%, exceeding market expectations. Overall CPI increased by 0.2% month-on-month and remained at 2.7% year-on-year, slightly below expectations [2][5]. - The inflation characteristics in July showed moderate goods prices and a rebound in services. Tariff costs are still being passed on to consumers, but some prices have started to decline [3][4]. Goods Price Analysis - The core goods price index increased by 0.2% month-on-month, consistent with the previous month. Notable increases were seen in furniture (+0.9%), curtains (+1.2%), and audio-visual equipment (+0.8%). However, some previously rising categories like appliances (-2.2%) and men's clothing (-1.3%) showed weakness [3]. - Used car prices rebounded to a month-on-month increase of 0.5%, while new car prices stabilized, indicating a potential shift in pricing strategies by manufacturers due to institutionalized tariff policies [3][5]. Services Price Analysis - The supercore price index, excluding rent, increased by 0.5% month-on-month, with significant contributions from previously declining airfares, which surged by 4%. This suggests a stabilization in travel activities [4][5]. - Other service prices, including vehicle maintenance (+1.2%) and medical services (+0.8%), continued to rise, indicating persistent inflationary pressures in the service sector [4]. Overall Inflation Outlook - The July CPI data does not alter the outlook for U.S. inflation, which is expected to rise structurally. The effects of tariff cost pass-through are anticipated to become more evident in the coming months, with core goods inflation facing upward risks [5][6]. - The Fed may struggle to reach a consensus on policy direction due to the mixed signals from inflation data, leading to increased volatility in the market [6].

Group 1 - The overall core inflation is largely in line with the target set by the European Central Bank [1] - Most long-term inflation expectations are around 2% [1] - Labor costs are continuing to trend towards moderation [1] Group 2 - Wage growth is expected to further slow down [1] - The economic outlook faces downside risks [1]

Core Insights - The European Central Bank (ECB) President Christine Lagarde stated that overall core inflation is in line with targets, indicating a stable inflation environment [1] - Labor costs are continuing to ease, suggesting potential for improved economic conditions and consumer spending [1] Economic Indicators - Core inflation metrics are meeting the ECB's objectives, which may influence future monetary policy decisions [1] - The easing of labor costs could lead to a more favorable economic outlook, potentially impacting wage growth and consumer confidence [1]

Group 1 - The European Central Bank (ECB) President Christine Lagarde stated that overall core inflation is in line with targets [1] - Labor costs continue to ease, indicating a potential slowdown in wage growth [1] - Wage growth is expected to further decelerate, which may impact consumer spending and economic growth [1]

Core Viewpoint - The chief economist of ING, Carsten Brzeski, maintains the expectation that the European Central Bank (ECB) will lower interest rates in September after a pause in today's meeting [1] Group 1 - Core inflation and service sector inflation remain above 2%, providing the ECB with little reason to move away from its current "comfort zone" [1] - If two more weak inflation data points emerge over the summer, along with hard data consistently underperforming soft data, a final rate cut may be seen in the September meeting [1]

欧洲央行：管理委员会已准备好调整所有工具。 信息与通胀评估基本一致。 数据将决定适当的货币政策立场。 迄今为止，经济总体上展现韧性。 资产购买计划和紧急抗疫购债计划正以有节制、可预测的速度下降。 将根据核心通胀、传导强度做出决定。 ...

Core Viewpoint - The Reserve Bank of Australia's Governor, Philip Lowe, emphasizes the need for data to support the forecast that core inflation will slow to 2.5% [1] Group 1 - The RBA is closely monitoring economic indicators to validate its inflation predictions [1] - Lowe's comments suggest a cautious approach to monetary policy adjustments based on incoming data [1] - The central bank's inflation target remains a critical focus for future economic strategies [1]