Huatai Securities: US CPI in November significantly lower than expected but with significant noise.

Huatai Securities pointed out that although the marginal increase in November CPI data has raised expectations of a rate cut by the Federal Reserve, due to the noise in inflation and labor data, the Fed may pause the rate cut and observe the situation. Since the tariff rates have not increased further and the transmission of tariffs on inflation is not obvious, the impact of tariffs on inflation is relatively mild, and the risk of high inflation in the United States is controllable. However, the downward trend in November inflation may be amplified by disruptive factors. The December non-farm payroll and CPI data to be released before the January meeting will be less affected by the government shutdown, providing more reliable information on the economy. Therefore, the Federal Reserve is currently in an observation period, and due to gradual improvements in the job market, the Fed is expected to temporarily postpone the rate cut in January, with 1-2 rate cuts expected in the second half of next year after the new Fed chairman takes office.