Inflation trends in multiple countries are diverging, and expectations for the U.S. Federal Reserve's "preventive interest rate cut" are heating up

On August 14, several Western countries including the United States, the United Kingdom, and France disclosed their latest inflation data. Among them, the CPI increase in July for both the UK and France rebounded from the previous month, while unadjusted CPI in the US further fell to 2.9%. After a rate cut by both Bank of England and European Central Bank earlier on, market attention is increasingly focused on how US inflation outlook will impact Federal Reserve's decision-making. Industry insiders believe that Fed is likely to implement "preventive rate cuts" in September this year. For domestic markets, cyclical resources are expected to achieve excess returns and northbound funds are expected to continue flowing in. However considering that capital market has priced Fed's rate cut expectations significantly ahead of time compared with past instances, actual implementation of rate cuts may have relatively mild impacts on asset prices.