Group 1: Report Industry Investment Rating No relevant content provided. Group 2: Report's Core View - The report constructs a multi - dimensional analysis framework based on long - term expectations, medium - term cycles, and short - term shocks to systematically sort out the core driving forces and future trends of US inflation [3]. - The Fed's "risk - management style" rate cuts will not restructure the inflation pattern as this round of cuts occurs in a non - recession environment and is more about maintaining economic resilience rather than causing a significant rebound in inflation [3]. - Long - term inflation expectations are anchored, and the Fed's independence remains a key stabilizer, with limited risk of long - term inflation getting out of control [3]. - Endogenous inflation momentum is slowing, and most structural sub - items show downward pressure, except for possible mild rebounds in durables and core services (excluding rent) inflation [3]. Group 3: Summary According to Related Catalogs 1. Inflation Analysis's Three - Dimensional Framework: Long - term Expectations, Core Dynamics, and Short - term Shocks - The Fed assesses inflation trends through a three - dimensional framework: long - term inflation expectations, core inflation, and short - term price shocks [11]. - Long - term inflation is anchored by monetary policy through expectations, core inflation's mid - term fluctuations are driven by the economic cycle, and external factors cause short - term disturbances [12]. - Long - term inflation expectations are the core pillar of the Fed's inflation management, core inflation reflects the domestic demand and labor market, and short - term shocks are usually temporary and exogenous [13]. - "Risk - management style" rate cuts generally do not lead to a significant inflation rebound based on historical experience and logical reasons [20][21]. 2. Is the Fed's Long - term Inflation Anchor Failing? - Although inflation has been persistently above the Fed's 2% target, the 5 - year/5 - year forward break - even inflation rate shows that the market's long - term inflation expectations remain stable [33]. - A quantitative model shows that the Fed's 2% inflation target has played a decisive role in guiding and stabilizing market expectations, and currently, the market may overestimate Trump's short - term impact on the Fed's independence [36][40]. 3. Reconstructing US Inflation Analysis: A Six - Sub - item Analysis Framework 3.1 Food and Beverage: Obvious Dual - Factor Drive of Commodity and Labor Costs - The cost of US food mainly concentrates on the middle and lower reaches of processing and circulation. The CRB food index and salary growth indicators are in a downward trend, so the food sub - item's upward momentum for overall inflation will weaken [3][51]. 3.2 Energy: Inflation Thrust Easing under Changing Supply - Demand Patterns - Energy has a significant impact on overall inflation. In 2025 - 2026, the global crude oil market's supply growth is expected to exceed demand, reducing the risk of a significant upward movement in US inflation [3][56][58]. 3.3 Rent: Lags US Housing Prices by about 15 Months - Rent is a key driver of CPI. In 2026, the year - on - year growth rate of rent is expected to slow to about 2.88%, leading to a 0.3% decline in overall inflation [3][71]. 3.4 Durables: May Face Some Upward Pressure in 2026 - Durables inflation may face upward pressure in 2026, but the pulling effect on inflation is expected to be mild due to the slowdown in the job market and consumer pressure [3][88]. 3.5 Non - durables: Obvious Cost - Driven Characteristics - Non - durables demand is rigid, and prices are mainly cost - driven. Based on the prediction of a decline in the crude oil price center in 2026, non - durables inflation is expected to cool down or fluctuate narrowly [91]. 3.6 Core Services: The Labor Market is the Core Driver - Core services inflation (excluding rent) is mainly driven by the labor market's tightness. Currently, the labor market is demand - driven, and there is no sustainable upward momentum for this type of inflation [3][111].

Group 1 - The core viewpoint of the article is the analysis of the December 2025 CPI data released by the National Bureau of Statistics, highlighting changes in both month-on-month and year-on-year figures [1] Group 2 - The month-on-month CPI increased by 0.2%, reversing a previous decline of 0.1%, primarily due to rising prices of industrial consumer goods, excluding energy, which rose by 0.6% [1] - The increase in CPI was driven by price hikes in communication tools (1.4%-3.0%) and domestic gold jewelry (5.6%), while energy prices fell by 0.5%, with gasoline decreasing by 1.2% [1] - Year-on-year CPI rose by 0.8%, an increase of 0.1 percentage points, marking the highest level since March 2023, mainly due to an expansion in food price increases [1] - Food prices increased by 1.1%, contributing approximately 0.17 percentage points to the CPI, with significant rises in fresh vegetables and fruits, while the decline in pork prices narrowed to 14.6% [1] - Core CPI rose by 1.2% year-on-year, remaining above 1% for four consecutive months, with service prices increasing by 0.6%, contributing about 0.25 percentage points [1] - The industrial consumer goods, excluding energy, increased by 2.5%, contributing approximately 0.63 percentage points, with gold jewelry prices surging by 68.5% [1]

Core Viewpoint - In December 2025, the Consumer Price Index (CPI) increased by 0.8% year-on-year, with urban areas rising by 0.9% and rural areas by 0.6%, indicating a steady increase in consumer prices driven by food and non-food price changes [1][4][6]. CPI Summary - The CPI rose by 0.2% month-on-month in December, reversing a previous decline of 0.1% [5]. - Core CPI, excluding food and energy, increased by 1.2% year-on-year, maintaining a growth rate above 1% for four consecutive months [6]. - Food prices rose by 1.1% year-on-year, with significant increases in fresh vegetables (18.2%) and fresh fruits (4.4%), contributing to the overall CPI increase [6][8]. - Energy prices decreased by 3.8% year-on-year, with gasoline prices dropping by 8.4% [6]. PPI Summary - The Producer Price Index (PPI) increased by 0.2% month-on-month, marking three consecutive months of growth [8]. - Year-on-year, the PPI decreased by 1.9%, but the decline was less severe than in previous months, indicating some stabilization in industrial prices [9]. - Key industries such as coal mining and lithium-ion battery manufacturing saw price increases, reflecting improved supply-demand dynamics [8][9]. - Input factors like international commodity prices influenced the price trends in domestic industries, with non-ferrous metal prices rising due to global market conditions [8][9].

Core Viewpoint - Taiwan's Consumer Price Index (CPI) for 2025 is projected to increase by 1.66%, marking the first time in four years that it falls below the inflation warning line of 2% [1] Group 1: CPI Overview - The CPI increase is primarily driven by food, miscellaneous items, and housing categories, with food prices rising significantly [1] - Specific increases include an 8.62% rise in fruit prices and a 4.62% increase in meat prices due to higher pork prices [1] - Housing-related costs also saw notable increases, with household management fees rising by 4.24% and rent increasing by 2.3% [1] Group 2: Impact on Different Demographics - There is a significant disparity in the perception of price changes among different households, particularly affecting those aged 65 and above and low-income families [1] - The overall CPI for Taiwan in 2025 is projected at 109.6, while the CPI for elderly households is 110.41 and for low-income households is 110.22, indicating a heavier burden compared to the average [1] - The differences in CPI impact are attributed to the consumption structure, where essential items like housing and food constitute a larger portion of expenditures for elderly and low-income households [1]

Core Insights - The cost of living in African countries varies significantly due to factors such as import dependence, currency strength, urbanization, and consumer demand [1][2][3] Group 1: Highest Cost of Living Countries - Seychelles ranks as the highest in Africa with a cost of living index of 64.5, driven by high prices for groceries (74.8) and dining out (66.2) due to its isolation and reliance on imports [1] - The Democratic Republic of the Congo has a cost of living index of 50.2, with high food and dining prices exacerbated by rental costs in major cities like Kinshasa [2] - Senegal follows with an index of 48.5, where daily expenses, particularly for groceries and restaurant dining, elevate the overall cost of living despite relatively affordable housing [3] Group 2: Other Notable Countries - Cape Verde has a cost of living index of 46.3, reflecting financial pressures from high food prices due to import reliance, although rental costs are low [4] - Côte d'Ivoire's index stands at 44.8, with rising food and dining prices impacting the low local purchasing power [5] - Angola's cost of living index is 42.3, with high rental costs in cities like Luanda, despite slightly lower grocery and dining costs compared to Seychelles [6] Group 3: Additional Insights - Ethiopia's cost of living index is 41.8, driven by high food prices in major cities, while moderate rental and dining costs provide some balance [7] - Cameroon has an index of 40.7, where restaurant expenses exceed grocery costs, and low purchasing power makes it difficult for residents to cope with rising living costs [8] - Mauritius has a moderate cost of living index of 38.3, with strong purchasing power due to low rental costs offsetting higher food and dining prices [9] - South Africa ranks lowest on the list with a cost of living index of 37.1, where balanced expenses and strong local purchasing power provide residents with better management of their finances [10]

Group 1: U.S. Inflation Challenges - The U.S. inflation rate reached 2.9% in August 2025, the highest since January of the same year, with a monthly increase of 0.4% in the Consumer Price Index (CPI) [3] - Food prices surged by 0.6% in a single month, marking the largest monthly increase in nearly three years, while oil prices rose by 1.9% [3] - 72% of the CPI components are experiencing price increases exceeding the Federal Reserve's 2% target, indicating a broadening inflationary trend [3] Group 2: Factors Driving U.S. Inflation - U.S. tariffs on key sectors like semiconductors and pharmaceuticals have led to cost increases for manufacturers, with some experiencing a 2%-5% rise in costs due to tariffs [6] - The labor market is tightening, with immigration policies causing labor shortages in sectors like agriculture, leading to price increases for fresh produce [6] - Internal divisions within the Federal Reserve complicate responses to inflation, with differing views on maintaining high interest rates versus considering preventive rate cuts [6] Group 3: China's Deflationary Pressures - China's CPI growth has remained near zero since 2023, with the GDP deflator index negative for eight consecutive quarters, indicating persistent deflationary pressures [9] - Despite a 5% actual GDP growth, the negative GDP deflator suggests that economic growth is not reflected in nominal terms, leading to a cold perception among businesses and consumers [9] - The Producer Price Index (PPI) has experienced over 30 months of negative growth, contrasting with previous periods where PPI was negative but CPI was positive [9] Group 4: Structural Issues in China's Economy - Weak housing prices and income expectations are creating a negative feedback loop that suppresses consumption and home buying, further dragging down prices [12] - The monetary supply (M2) has increased by approximately 20% from October 2022 to December 2024, yet price indicators remain low, indicating a blockage in the monetary policy transmission mechanism [13] - The real estate market's downturn is causing credit contraction in the private sector, leading to reduced investment and fiscal stress for local governments [14] Group 5: Comparative Policy Responses - The Federal Reserve's focus is on controlling inflation without triggering a recession, constrained by political pressures and rising costs from tariffs [16] - China's policy approach is shifting towards repairing the internal economic cycle and expanding domestic demand, moving away from traditional investment-driven growth [17] - The contrasting economic conditions in the U.S. and China are leading to increased global financial market uncertainty and reshaping global trade dynamics [17]

Group 1: Price Trends in Consumer Goods - Recent years have seen significant price increases in essential consumer goods such as cooking oil, sanitary paper, and shower gel, with monthly living expenses rising noticeably for residents [2] - Starting from November, five major consumer goods are experiencing a concentrated price drop, which is expected to save consumers money [2] Group 2: Real Estate Market - The second-hand housing market is experiencing a continuous decline, with the average price in September at 13,381 yuan per square meter, a year-on-year decrease of 7.38% [4] - The decline in second-hand housing prices is attributed to three main factors: a cumulative price drop exceeding 30%, stagnant or declining household income, and a more rational approach to home buying post-pandemic [4] Group 3: Automotive Market - A price war has erupted in the domestic automotive market, with numerous brands participating in price reductions, including a 1.5 million yuan drop for a domestic electric vehicle and 2.5-3 million yuan for popular joint venture brands [6] - The reasons for the automotive price drop include year-end sales targets, increased competition from new energy vehicles, and the entry of tech companies into the automotive sector [6] Group 4: Mobile Phone Market - The mobile phone market has also seen significant price reductions, with average discounts ranging from 10% to 20% across various brands [8] - Factors contributing to the price drop include rapid product turnover, lack of significant technological advantages among brands, and a decrease in consumer purchasing due to stagnant income [8] Group 5: Pork Prices - Pork prices have entered a downward trend, with prices dropping below 20 yuan per jin, currently around 17-18 yuan per jin [11] - The decline is driven by an oversupply in the market due to increased pig farming and a shift in consumer preference towards healthier meat options [11] Group 6: Rental Market - The rental market is experiencing a downward trend, with rental prices in cities like Shanghai decreasing from 6,000 yuan to 5,500 yuan per month [14] - The decline in rental prices is influenced by reduced demand due to job scarcity in cities and declining local incomes [14]

Price Trends Overview - Starting from 2025, many essential consumer goods are expected to see price increases, including cooking oil, household paper, and toiletries, leading to higher shopping costs [2] - However, a price reduction trend has begun in November, particularly in the real estate and automotive sectors [2] Real Estate Market - The average price of second-hand residential properties in 100 cities has decreased to 13,381 yuan per square meter, a year-on-year decline of 7.38%, marking 41 consecutive months of month-on-month price drops [2][3] - Factors contributing to the anticipated price drop in the second-hand housing market include: 1. A four-year decline in property prices has led many speculators to sell off properties, increasing downward pressure on prices [3] 2. The domestic economy is in a deflationary cycle, with many individuals experiencing reduced incomes or unemployment, making it difficult to sustain high property prices [3] 3. Post-pandemic, consumers are more rational in their purchasing decisions, focusing on actual needs rather than impulsive buying [3] Automotive Market - Numerous domestic and international automotive brands have announced price cuts, with some models seeing reductions of 15,000 yuan or more [5] - The automotive price war is driven by: 1. Brands aiming to boost year-end sales and reduce inventory through price promotions [5] 2. Increased competition between traditional fuel vehicles and a surge of new energy vehicles [5] 3. Entry of tech companies like Xiaomi and Huawei into the automotive market, leading to oversupply and necessitating price cuts for cash flow [5] Mobile Phone Market - The mobile phone market is experiencing a price reduction trend, with significant discounts on popular models such as the iPhone and Huawei [8] - Reasons for the price decline include: 1. Rapid product turnover necessitating discounts to clear old stock [8] 2. High levels of product homogeneity among brands, forcing them to lower prices to boost sales [8] 3. Decreased consumer purchasing power leading to reduced demand for new phones [8] Pork Market - Domestic pork prices have been on a downward trend, currently ranging from 17 to 18 yuan per kilogram, with expectations of continued declines [10] - Contributing factors include: 1. Increased supply due to capital influx into pig farming, resulting in oversupply [10] 2. Shifts in consumer preferences towards lower-fat meats, reducing demand for pork [10] Rental Market - Rental prices across various cities have shown significant declines, with examples of reductions in major cities [13] - The decline in rental prices is attributed to: 1. Difficult job markets and high living costs prompting many workers to return to their hometowns [13] 2. Decreased incomes making it challenging for residents to afford current rental prices [13]

Inflation Trends - The August CPI showed a significant rebound, with a month-on-month increase from 0.2% in July to 0.38% in August, slightly above the market expectation of 0.33%[5] - Year-on-year CPI growth rose from 2.7% to 2.9%, indicating a return to an upward trend[5] - Core CPI month-on-month growth increased from 0.32% to 0.35%, also exceeding market expectations of 0.31%[5] Employment Concerns - The number of first-time unemployment claims rose by 27,000 to 263,000, the highest level since October 2021, significantly surpassing the market expectation of 235,000[6] - The projected increase in employment from April 2024 to March 2025 was revised down by 91,100, with average monthly job growth adjusted from 136,000 to 60,000[6] - The risk of employment deterioration is now seen as greater than the risk of uncontrolled inflation, leading to an 81% probability of three rate cuts this year[1] Federal Reserve Actions - The Federal Reserve is expected to cut rates twice, in September and December, totaling a 50 basis point reduction, with the year-end target for the federal funds rate set at 3.75%-4%[1] - Further rate cuts are anticipated next year, potentially bringing the year-end target down to 3.25%-3.5% as economic growth stabilizes and inflation recedes[1]

Core Insights - The article highlights the ongoing support of various consumer subsidy policies for durable goods prices, contributing to a sustained increase in core CPI year-on-year, while noting the sluggish recovery in rental and household service prices [1][2]. CPI Analysis - In July, the CPI increased by 0.4% month-on-month, aligning with seasonal trends, while year-on-year figures remained flat. Core CPI rose to 0.8%, the highest since March 2024 [2]. - Key drivers of core CPI include: 1. Strong price increases in consumer policy-supported sectors, with living goods and services prices rising by 0.8% month-on-month, significantly above the seasonal average of 0.26% [2]. 2. Rising gold prices and a surge in consumer gold purchases led to high growth in other goods and services CPI [2]. 3. Summer travel remains robust, although the growth rate of tourism CPI has slightly decreased compared to 2023 and 2024, indicating potential in the tourism and service consumption markets that requires further policy guidance [2]. 4. Rental and household service CPI saw a modest increase of 0.1% month-on-month, which is below historical averages, indicating limited recovery progress [2]. PPI Analysis - In July, the PPI decreased by 0.2% month-on-month and 3.6% year-on-year, with the decline rate remaining stable. The PPI is showing signs of stabilization, supported by raw material prices due to intensified "anti-involution" policies, although downstream factory prices remain weak due to overcapacity and export competition [3]. - The positive impact of "anti-involution" policies on PPI is expected to be gradual and long-term. Current capacity optimization policies have expanded from traditional industries like coal, steel, and cement to emerging sectors such as automotive, photovoltaics, and batteries, affecting nearly 20% of industry revenue [3].