U.S. Inflation Data Looms, Market Awaits New Signals on Interest Rate Policy

Global investors are closely watching the upcoming U.S. inflation data, scheduled for release on Wednesday before the New York stock market opens. Although last month's Consumer Price Index (CPI) remained at 2.5%, the market widely anticipates a slight fluctuation in this release, with expectations concentrated in the 2.3% to 2.6% range. Core inflation is also projected to show a similar trend, reflecting an overall stabilization of price pressures.

It is worth noting that the weakness in last month's inflation data was mainly due to the decline in gasoline prices. However, the recent escalation of geopolitical tensions, particularly the increased risk to energy supplies in the Middle East, has led to a rebound in international oil prices, potentially adding upward pressure to this month's data. The resurgence of energy costs is becoming a key variable influencing the trajectory of inflation.

Several mainstream institutions have made judgments on the data's trend. Crédit Agricole noted that while overall inflation may be moderate, core service prices will continue to rise moderately. It expects a three-month annualized core inflation rate of 3.1%, slightly lower than previously anticipated. The bank's analysis suggests that the transmission effect of the Middle East conflict on oil prices is reinforcing the Federal Reserve's inclination to maintain current interest rates. Bank of America predicts that both core and overall inflation will increase by 0.3% month-on-month, indicating that inflation control remains on a manageable track. Citigroup also believes that the data is unlikely to trigger the Federal Reserve to adjust its policy in the short term, noting that housing costs remain a stubborn component of inflation, while service prices are expected to gradually slow down. Overall, while this inflation report may not overturn the existing policy path, it will provide key clues to the market, influencing the reconstruction of interest rate expectations in the second half of the year. Investors are awaiting this data to determine whether the Federal Reserve will begin a rate-cutting cycle around 2026, thereby adjusting their asset allocation strategies.