The U.S. Department of Labor has released the latest inflation data for the United States. The data shows that the U.S. CPI (Consumer Price Index) rose by 2.4% year-on-year in September, slowing down from August (2.5%), marking the smallest year-on-year increase since February 2021, but slightly exceeding the market's general expectation of 2.3%. The CPI increased by 0.2% month-on-month in September, matching the gains in August and July, and also higher than the market's general expectation of 0.1%.

"Overall, the U.S. inflation rate has dropped to a three-year low, but the 'cooling' speed is lower than expected," said Si Donghai, a senior investment consultant at Ju Feng Investment Consulting, in an interview with the Securities Daily.

After excluding the more volatile food and energy prices, the U.S. core CPI in September increased by 3.3% year-on-year, slightly exceeding expectations and the August level (3.2%); it rose by 0.3% month-on-month, in line with August (0.3%), but slightly above market expectations.

The slowdown in the U.S. CPI growth in September was mainly due to the decline in energy prices, which had a restraining effect on U.S. inflation. However, the core CPI price growth rebounded year-on-year, mainly driven by the rebound in used car prices, which led to a rise in core goods inflation. Overall, the slightly higher-than-expected U.S. inflation data in September is not due to overheated consumption or a tight labor market, and it is not sufficient to form a basis for "reflation."

Yang Haiping, a researcher at the Securities and Futures Research Institute of Central University of Finance and Economics, also told the reporter that from the data, the U.S. inflation level is still on a downward trend, with September's data only slightly higher than market expectations. Overall, it does not support the judgment that "inflation is facing rebound pressure," so it is preliminarily judged that the Federal Reserve will continue to cut interest rates in November.

Looking forward to the subsequent U.S. inflation situation, Bai Xue believes that on the one hand, energy and food prices may provide some support to U.S. inflation in the short term, but against the backdrop of continued weak global demand expectations, the upward support of energy prices on inflation is limited. On the other hand, the downward trend of U.S. core inflation may still be relatively slow.

"Overall, the U.S. inflation situation remains complex, with both downward and upward factors, and the foundation for the decline in inflation is not yet solid, with future trends still uncertain," said Bai Wenxi, Chief Economist of China Enterprise Capital Alliance China, who believes that the U.S. inflation data in September exceeded expectations, also bringing new challenges to the Federal Reserve's monetary policy, which needs to find a balance between controlling inflation and supporting economic growth.

At 2:00 a.m. Beijing time on September 19, the Federal Reserve announced a 50 basis point interest rate cut, the first since 2020, marking a formal shift in monetary policy. The Federal Reserve's published schedule shows that on November 7, Beijing time, the Federal Reserve will hold an FOMC (Federal Open Market Committee) meeting and announce the interest rate decision the next day. According to FedWatch data on October 11, the market bets on the probability of the Federal Reserve cutting interest rates by 25 basis points in November at 84.3%, and the probability of maintaining the interest rate level unchanged at 15.7%.

Si Donghai said that, combining the current CPI data and market expectations, the possibility of the Federal Reserve cutting interest rates at the November meeting is relatively high. If inflationary pressures persist, the Federal Reserve may keep interest rates unchanged or only make minor adjustments; if there are clear signs of a slowdown in the U.S. economy, the interest rate cut may be larger.

Zheng Lei, Chief Economist of Samoyed Cloud Technology Group, said that the market is currently expecting the Federal Reserve to cut interest rates by 25 basis points at the November meeting. However, the Federal Reserve often considers more factors, such as economic data, employment situation, inflation expectations, etc., and it will continue to observe inflation and employment situations."The slightly higher-than-expected CPI in September does not affect the Federal Reserve's continued gradual interest rate reduction process, and it is expected that there will still be a 25 basis point rate cut in November." Bai Xue believes that the Federal Reserve will continue the interest rate reduction process in November, and it is highly likely that there will still be a 25 basis point rate cut. On one hand, the significant rebound in the U.S. non-farm data in September and the unexpected warming of the ISM non-manufacturing PMI (Purchasing Managers' Index) in September indicate that the risk of the U.S. economy "recession" is not high at present, and there is no need for another significant rate cut. On the other hand, looking at the minutes of the Federal Reserve's interest rate meeting in September, there is a significant internal division over a 50 basis point preemptive rate cut, with some participants believing that a 25 basis point rate cut should be made, and a few participants originally also believed that a 25 basis point rate cut should be made. Combining the recent statements of Federal Reserve officials, most are inclined to follow up with a 25 basis point rate cut.