Institution: U.S. CPI Data Short-Term Risk Still Skewed to the Upside

On July 22nd, Anthony Willis, a senior economist at Columbia Threadneedle Investments, pointed out that although the US inflation situation is relatively mild, the current level is still notably higher than the Fed's 2% target, and short-term risks still tend to be on the upside. He said, "The current data will cause the Fed to remain in a 'wait-and-see' mode during the release of the July and August CPI data until the next interest rate meeting on September 17th." By that time, the Fed should be able to more clearly evaluate the transmission effects of tariffs on inflation and obtain more evidence of weakness in the labor market. Willis believes that inflation is likely to move towards 3%, but considering the dual mandate, the Fed may still consider it necessary to cut interest rates later this year. (FX678)