Overview - The August CPI in the US met market expectations, showing a year-on-year increase of 2.9% and a month-on-month increase of 0.4% [1][3] - Core CPI also aligned with expectations, recording a year-on-year increase of 3.1% and a month-on-month increase of 0.3% [1][3] - Despite the overall CPI meeting expectations, the structure indicates limited inflationary pressure, particularly due to weak tariff-related goods and a decline in super core service inflation [1][3] Structure - The core goods CPI increased by 0.3% month-on-month in August, up from 0.2% in July, driven mainly by new and used cars and clothing, while other categories like washing machines and medical goods showed weakness [1][15] - In the core services category, rent saw a slight increase to 0.4%, but super core services weakened, reflecting a decline in employment in related sectors [2][22] Outlook - The outlook for inflation suggests a "slower and longer" trend, with CPI expected to remain around 3.0% for the next three quarters according to Bloomberg forecasts [3][27] - The probability of the Federal Reserve implementing three rate cuts within the year has increased, driven by limited inflationary pressure and higher-than-expected initial jobless claims [3][32] - Employment trends are anticipated to be a core contradiction for the Federal Reserve's decisions moving forward, with a potential rise in unemployment rates above 4.5% being a key factor [3][32]

Group 1: Inflation Trends - The overall CPI in the US increased by 2.4% year-on-year in May 2025, with a month-on-month increase of 0.1%, which was below market expectations[2] - Core CPI rose by 2.8% year-on-year and 0.1% month-on-month, also falling short of market expectations[2] - Energy inflation continued to decline, with a year-on-year decrease of 3.5% in May, while food prices increased by 2.9% year-on-year[3] Group 2: Core Inflation Insights - Core inflation remained stable, indicating that the impact of tariffs on US inflation may be less than anticipated[3] - The month-on-month growth rate of core CPI was lower than expected, which may alleviate market concerns about inflation[3] - The contribution of core goods to inflation is increasing, with core goods year-on-year growth rising to 0.28% in May[3] Group 3: Tariff Impact - Tariffs are expected to have a gradual impact on inflation, with evidence of businesses passing costs onto consumers[4] - Less than 30% of businesses chose not to pass on tariff costs, with most completing cost transfers within three months[4] - The potential for "stagflation" is currently low, as stable oil and food prices help anchor inflation expectations[5] Group 4: Future Outlook - The Federal Reserve is cautious about interest rate cuts, with the first potential cut expected in Q4 2025, possibly fewer than anticipated[5] - Ongoing monitoring of inflation trends and tariff policies is essential, especially with upcoming FOMC meetings and tax legislation[5]