Huatai Securities: Maintains Judgment on Fed's Two Rate Cuts in September and December

Contrary to rumors, Huatai Securities stated that looking ahead, tariff transmission may further push up core commodity inflation, but considering the potential slowdown in the job market, we maintain our judgment on the Fed's two rate cuts in September and December. June CPI data shows that inflation of imported goods, which are highly dependent on imports, has rebounded, refuting claims of overseas exporters lowering prices and tariffs not being transmitted. Considering that in May, the weighted average import tariff rate in the US was only 8.7%, and some companies delayed price transmission by consuming inventory, we expect tariff transmission to inflation to become more apparent in the future, potentially raising US inflation in the short term. A survey by the New York Fed also confirms that 88% of manufacturing companies and 82% of service companies choose to pass on tariffs to consumers within 3 months. At the June FOMC press conference, Powell stated that the Fed needs to observe the impact of tariffs over the summer, and the rise in inflation may already be within the Fed's expectations.

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