<\/a>Inflation side: overall pressure eases, underlying stickiness remains<\/strong><\/p>\n Inflation data in July continued to release cooling signals: CPI fell further to 3.4% year-on-year, and PPI recorded 4.7% year-on-year, a new low since March. Both were lower than market expectations. From a structural perspective, commodity prices were the main drag. Among them, energy prices fell by 3.1% month-on-month, which significantly eased the price pressure on the overall production side, confirming that the impact of oil prices pushed up by geopolitical conflicts in the early stage is gradually fading.<\/p>\n However, after a layered dismantling, the CD Markets research team found that the endogenous stickiness of inflation has not been completely eliminated. The core final demand PPI after excluding food, energy and trade services accelerated from 0.1% to 0.4% month-on-month. Service prices remained strong, and construction prices rose sharply by 2.2%. This means that the current fall in inflation is highly dependent on energy items, endogenous price pressures are still resilient, and it is too early to conclude that \"inflation wins.\"<\/p>\n <\/a>Consumer side: Retail sales recorded the largest decline in the initial stage, with momentum slowing down rather than stalling.<\/strong><\/p>\n U.S. retail sales fell 0.6% month-on-month in July, the largest decline since May last year. Retail sales in the core \"control group\" used for GDP accounting fell 0.4% month-on-month, hitting a new low since the beginning of 2025. On the surface, there is a strong signal of cooling consumption. However, we believe that it is not appropriate to be overly pessimistic about single-month data. There are clear short-term disturbances in the weakening data:<\/p>\n Amazon's Prime Day promotion was advanced from July to June, overdrafting online consumer demand; the World Cup in June pushed up the leisure consumption base, which together led to a month-on-month decline in July data. After excluding seasonal and event-related factors, private sector consumption still maintains weak positive growth, and residents' savings levels are still higher than before the epidemic. The proportion of credit card repayments in full continues to increase. Household financial conditions have not deteriorated. The current trend is more towards the phased convergence of consumption momentum rather than a recession signal that consumption is stalling.<\/p>\n <\/a>Employment: Initial applications rose slightly, labor market margins loosened<\/strong><\/p>\n The number of initial jobless claims disclosed during the same period rose to a new high since mid-July. Combined with the previous non-farm employment data that was less than expected, they jointly pointed to the U.S. labor market transitioning from \"extremely tight\" to moderate cooling. The marginal loosening of employment has provided fundamental support for the Federal Reserve to slow down its tightening pace.<\/p>\n <\/a>Policy expectations are rapidly reconstructed: the window for raising interest rates in September narrows, but internal differences remain<\/strong><\/p>\n As inflation and consumption data have both cooled, the market's pricing for the Federal Reserve to raise interest rates in September has dropped from more than half to about 40%, and expectations for multiple interest rate hikes during the year have been significantly weakened. CD Markets judged that at present, it can only confirm that \"the urgency of raising interest rates has decreased\", and it is far from the point of turning to easing. There is still a clear differentiation of positions within the Federal Reserve:<\/p>\n It is worth noting that the market generally focuses on the short-term interest rate game, but easily ignores the structural pressure on long-term yields. The continued expansion of the U.S. fiscal deficit has driven an increase in the supply of government bonds. The $25 billion in 30-year U.S. bonds issued this week hit the highest issuance yield since 2001. The upward pressure on long-term interest rates comes from the imbalance between fiscal supply and demand rather than monetary policy, which will continue to offset part of the effects of monetary tightening and is also the underlying background that cannot be ignored in subsequent policy formulation. Regarding subsequent policy communication, we judge that the upcoming Jackson Hole annual meeting of global central banks will be a key window. Federal Reserve Chairman Warsh is expected to use this to clarify the policy logic of suspending interest rate hikes in July, replace the previous vague \"no guidance\" strategy, and alleviate excessive fluctuations in market expectations.<\/p>\n![\"Partial](\"https:\/\/www.ycnkyy.com\/wp-content\/uploads\/2026\/08\/20260817_151458.png\")
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