Analysis: The Fed May Cut Interest Rates by 25 Basis Points in October and December

October 27th: The China Gold Research Report indicated that the seasonally adjusted monthly growth of the U.S. September CPI was 0.3%, reaching a 3.0% year-on-year rate. The core CPI increased by 0.2% month-on-month and 3.0% year-on-year, which was lower than market forecasts. When looking at the details, the drag from rent and used car prices was more evident, indicating weakened demand in these sectors. This is speculated to be related to Trump's policies of restricting and deporting immigrants. The prices of goods affected by tariffs showed mixed trends, but the speed and magnitude of their price hikes were lower than our previous expectations. This also reflects weak end demand as businesses are finding it difficult to pass on tariff costs to consumers. Service inflation remains robust. Overall, this inflation data is relatively moderate, supporting the Fed's continued rate cuts. Given the downward risks in the labor market, we anticipate that the Fed will cut interest rates by 25 basis points in both October and December. (FX678)