On November 27, data released by the U.S. Department of Commerce showed that U.S. inflation has once again heated up. The data indicates that the U.S. Personal Consumption Expenditures (PCE) price index rose by 2.3% year-on-year in October, a 0.2 percentage point increase from September, and the core PCE price index, excluding food and energy prices, rose by 2.8% year-on-year in October, also rebounding by 0.1 percentage point compared to September.
Among the indicators measuring inflation in the United States, the PCE price index has always been favored by the Federal Reserve, as it is considered to better gauge long-term inflation trends, especially the core PCE price index, which reflects changes in consumer spending patterns. After rebounding again in October, multiple analysis agencies predict that U.S. inflation may rise further in the future, particularly in 2025, and based on this, they have further lowered expectations for the Federal Reserve's interest rate cuts in 2025.
Analysts at Goldman Sachs stated in a recently released report that the U.S. PCE price index will rise significantly in 2025. Analysts at Deutsche Bank have also raised their inflation forecast for the U.S. in 2025 in their latest report, predicting that the U.S. PCE price index will be 'flat or above' 2.5% next year, higher than the previous expectation of 2%. The report states, 'It has proven that inflation is more persistent than many expected and may rise slightly in the coming months. This could disrupt the outlook for the frequency and magnitude of Federal Reserve rate cuts.'
In September of this year, the Federal Reserve aggressively initiated a rate-cutting cycle by 50 basis points and cut rates again by 25 basis points earlier this month. However, since then, several Federal Reserve officials, including Chairman Powell, have mentioned in multiple speeches that the trajectory of U.S. inflation's decline may continue to experience bumps, advocating for a cautious approach to rate cuts. Several analysis agencies, including Goldman Sachs, Deutsche Bank, Barclays, and Morgan Stanley, have subsequently lowered their expectations for the magnitude and frequency of Federal Reserve rate cuts in 2025. Goldman Sachs' latest prediction is that the pace of rate cuts will slow, with the Federal Reserve expected to cut rates by 25 basis points in June and September 2025, following an earlier prediction of May and June. Barclays anticipates two rate cuts from the Federal Reserve in 2025, down from three previously estimated. Analysts at Morgan Stanley stated that the path of U.S. inflation decline over the next two years will be more challenging, and the Federal Reserve will maintain a cautious approach to future rate paths, pausing rate cuts starting in the second quarter of next year. Analysts at Deutsche Bank even predicted that the Federal Reserve will make its last rate cut of 25 basis points in December this year, before pausing further cuts.
Although the latest inflation data has rebounded again, supporting the Federal Reserve's cautious stance on rate cuts, market expectations for a rate cut by the Federal Reserve in December have not been dampened following the data release. The Chicago Mercantile Exchange's 'FedWatch Tool' shows that currently, the market expects a 25 basis point rate cut by the Federal Reserve in December this year, with the likelihood increasing by 5 percentage points from the previous day to about 68%.#NFT市场回暖 
