Preamble:
Recently, a set of important economic data from the United States has attracted the attention of the market, and that is the Consumer Price Index (CPI) data in the United States. Since the CPI data is closely related to the level of inflation, a large deviation in the data can have a significant impact on the market.
The latest data shows that the performance of US CPI is not satisfactory, and there is even a possibility of a sharp decline, which also means that the expectations of the dovish camp have been boosted, and the hawkish stance of raising interest rates may be hit to some extent.
The decline in CPI data may also have a profound impact on other aspects, such as the housing market, consumer purchasing decisions, etc., which need to be closely watched.
First, the CPI data may decline sharply
It is reported that the latest CPI data shows some signs of less-than-optimism, and there may even be a sharp decline. On the one hand, due to the impact of the epidemic, domestic economic activity in the United States has been suppressed to a certain extent, which has also led to a decline in the demand for some goods and services, which has had a certain impact on the price level.
On the other hand, with the gradual easing of the epidemic, some special factors may also gradually emerge, such as seasonal factors, etc., and these factors are likely to expand the overall inflation level, which will have a certain impact on the CPI data.
2. The views of the chief economist of Morgan Stanley
In response to the performance of the CPI data, the chief economist of Morgan Stanley also made some predictions, and he believes that there may be some unexpected changes in the inflation level in the future. Specifically, he believes that rental inflation is likely to fall sharply, while core goods prices are likely to fall, and there could be some unexpected mild reversal in services inflation.
Judging from the current situation, these predictions of the chief economist of Morgan Stanley are not unreasonable, in fact, whether from a macroeconomic point of view or from the current international situation, such judgments are reasonable.
First of all, with the gradual easing of the international epidemic, the economic activities of various countries will gradually return to normal, which means that some special inflation factors may gradually weaken, such as the rise in raw material prices, etc., which will have a certain impact on the CPI data.
Secondly, with the gradual easing of the epidemic in the United States, the demand for some service industries will gradually increase, which will also help to alleviate the inflationary pressure on the service industry to a certain extent.
3. The impact of the decline in inflation data on all aspects
1. The impact on the Fed's interest rate hike expectations
In the current macroeconomic situation, the Fed has been very cautious about raising interest rates in the future, and they have said that they will not consider raising interest rates anytime unless there is a significant increase in inflation. Once the CPI data declines sharply, it will inevitably have a certain impact on the Fed's interest rate hike expectations, and may even cause the market to re-expect the Fed's monetary policy, which will have a certain impact on the prices of various assets.
2. Impact on the real estate market
Under the current inflation expectations, many investors are focusing on the real estate market, believing that the rise in inflation will have a certain boost to the real estate market, so as to get more investment returns. However, once there is a sharp decline in inflation data, especially rental inflation, it is likely to have a greater impact on investors' expectations, and they may gradually reduce their investment in the real estate market, or even choose other investment targets, which is not good news for the real estate market.
3. Impact on consumers' purchase decisions
Generally speaking, in the case of rising inflation, consumers will be more inclined to spend in advance, so as to avoid future price increases, which will have a certain effect on economic activity over a period of time.
Once there is a sharp decline in inflation data, consumers may believe that the price level will fall in the future, which may have some impact on their purchasing decisions, especially the sales of some consumer goods may fluctuate to a certain extent.
Fourth, how to view the decline in inflation data
1. The impact of seasonal adjustments
In the current CPI data, some seasonal factors may have a certain impact on the inflation data, especially at some special time nodes, such as around holidays, etc., these factors are likely to exaggerate the decline in inflation data, thus bringing a certain impact to the market. Therefore, when analyzing inflation data, we must pay full attention to these seasonal factors and cannot easily make judgments about the overall economic situation.
2. Structural changes in inflation
In addition to some superficial seasonal factors, the decline in inflation data may also reflect some structural changes, such as certain price declines in some specific industries and sectors, which is likely to have a certain impact on the overall inflation level. Therefore, when formulating relevant policies, the regulatory authorities must also fully take into account these structural changes and introduce some targeted policy measures to fundamentally alleviate the pressure of inflation, rather than simply relying on monetary policy to respond.
Epilogue:
In general, the possible decline in the current CPI data has had a certain impact on the market and has also brought certain challenges to all aspects, especially in the current macroeconomic situation, various uncertainties may be amplified. Therefore, we must maintain a high degree of sensitivity to these changes, not be easily confused by data, but think from a deeper perspective, find the rules and clues, so that we can better respond to various risks and challenges, and make correct judgments and decisions.