On February 15, Soochow Securities analyzed that although US inflation in January slowed down for four consecutive months, judging from the slope, the rate of slowdown was significantly weakened; superimposed on the unexpectedly strong employment in January Data, we think this reflects that core inflation, especially the stickiness of core service inflation other than housing, still exceeds the Fed‘s expectations. Therefore, the January inflation data will solidify the Fed’s current consensus on raising interest rates “slower, higher, and longer”.
The 25bp interest rate hike in March is not the end. We expect the Fed to raise interest rates slightly and gradually in the first half of the year, and the financial market has not yet fully priced in a more hawkish Fed.
