Decisive Battle Against CPI: December Inflation May Experience a "Rebound," Watch Out for Extremes Risks

BlockBeats News, January 12 — The market generally expects that the US CPI for December may experience a phased rebound (data to be released this Tuesday at 21:30). This is mainly due to the statistical correction effects following the normalization of the Bureau of Labor Statistics survey, and does not necessarily indicate a structural deterioration in inflation.

The release of November non-farm payrolls and CPI data is close in timing. Non-farm payrolls data show that the US labor market continues to cool, with the unemployment rate rising to 4.6% (4.573% before rounding), the highest in nearly four years. However, due to the residual effects of the government shutdown, the reliability of the data is questioned, and it has not significantly reinforced market expectations of an early Fed rate cut.

Interest rate futures indicate that the market generally expects the January meeting to keep rates unchanged. The first rate cut may occur in March, April, or June, but none of these options have a consensus pricing exceeding 50%, showing that the path remains highly uncertain. The mainstream expectation for this CPI is:

Overall CPI annual rate: Slightly rising from 3.0% to 3.1%
Core CPI annual rate: Remaining at 3.0%

Three scenario analyses:

1. In line with expectations: Limited impact on risk assets, market focus on key technical levels.
2. Significantly above expectations (especially core CPI): Rising concerns about inflation stickiness, potentially suppressing risk appetite in the short term.
3. Unexpected sharp decline (low probability): May resonate with weakening employment, reinforcing easing expectations and benefiting risk assets.

December CPI may become a short-term market volatility amplifier, requiring close attention to the impact of “extreme value readings” on interest rate expectations and asset pricing.