On November 27, data released by the U.S. Department of Commerce showed that inflation in the United States has risen again. The data indicated that the PCE price index for personal consumption in the U.S. rose by 2.3% year-on-year in October, an increase of 0.2 percentage points compared to September. Excluding food and energy prices, the core PCE price index for October also rose by 2.8% year-on-year, expanding by 0.1 percentage points compared to September.
In the indicators measuring inflation in the United States, the PCE price index has always been favored by the Federal Reserve, as it is believed to better reflect long-term inflation trends, particularly the core PCE price index, which can reflect changes in consumer daily consumption trends. After rebounding again in October, multiple analysis agencies predict that inflation in the United States may further rise in the future, especially in 2025, and based on this, they have further lowered their expectations for the Federal Reserve's interest rate cuts in 2025.
Analysts at Goldman Sachs stated in a recently released report that the PCE price index in the United States will rise significantly in 2025. Analysts at Deutsche Bank also raised their inflation forecast for the U.S. in 2025 in their latest report, expecting the PCE price index next year to be 'flat or above' 2.5%, higher than the previously expected 2%. The report states, 'It has been proven that inflation is more persistent than many expected and may rise slightly in the coming months. This could disrupt the outlook for the number and magnitude of Federal Reserve rate cuts.'
In September this year, the Federal Reserve aggressively began a rate-cutting cycle with a 50 basis point reduction and cut rates again by 25 basis points earlier this month. However, since then, multiple Federal Reserve officials, including Chairman Powell, have mentioned in several speeches that the trajectory of U.S. inflation may continue to experience bumps, leading to a cautious approach to rate cuts. Several analysis agencies, including Goldman Sachs, Deutsche Bank, Barclays, and Morgan Stanley, have also lowered their expectations for the magnitude and frequency of rate cuts by the Federal Reserve in 2025. Goldman Sachs' latest forecast indicates 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 after March 2025, whereas the previous forecast was for May and June. Barclays anticipates two rate cuts in 2025, down from three previously estimated. Analysts at Morgan Stanley stated that the path of declining inflation in the U.S. over the next two years will be more challenging, and the Federal Reserve will maintain a cautious stance regarding future interest rate paths, pausing rate cuts starting in the second quarter of next year. Deutsche Bank analysts even predict that the Federal Reserve will cut rates by 25 basis points for the last time this December and then pause rate cuts.
Although the latest inflation data has rebounded again, supporting the Federal Reserve's cautious approach to 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 rising by 5 percentage points from the previous day to about 68%.#NFT市场回暖 