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2025-12-19 00:42:23
[ING: More interest rate cuts may be implemented in 2026 if the job market does not stabilize] (1) Data from the U.S. Department of Labor shows that the CPI rose 2.7% year-on-year in November, while the core CPI rose only 2.6% year-on-year, both lower than the market expectation of 3%, and core inflation hit a new low since March 2021. (2) The cooling of inflation is due to the combined effect of multiple factors. Inflation in food, housing, medical services and other sub-items has declined, gasoline prices are below $3/gallon, and the rise in energy prices is only a temporary phenomenon. Although the government shutdown resulted in the absence of data in October, and the market had some doubts about the inflation data, this also explains the calm statement made by Fed Chairman Powell earlier. (3) In terms of the job market, the number of unemployed people exceeds job vacancies, and wage growth is expected to fall to 2.5%, further easing inflationary pressures and making inflation likely to approach the Fed's 2% target more quickly. It was originally expected that the Fed would cut interest rates once in March and once in June. Current inflation and employment data show that if the job market does not stabilize, more interest rate cuts may be implemented in 2026.
