CICC: Fed's need to accelerate rate hikes is not strong, maintaining forecast of a 25bp hike in December

Odaily reports: A CICC research report notes that US October CPI rose 0.4% month-on-month on a seasonally adjusted basis (0.6% last month), while core CPI rose 0.3% month-on-month (0.3% last month), both above market expectations. Overall, inflation stickiness remains strong, with core CPI rising 0.3% month-on-month for the third consecutive month, supporting the Fed's continued rate hikes. Recently, Fed Governor Waller suggested that a 50 basis point hike in December cannot be ruled out. However, we believe the Fed's policy has not clearly fallen "behind the curve," and given that financial conditions have already tightened marginally, the need to accelerate rate hikes is not strong. We maintain our baseline forecast of a 25 basis point hike in December, and the pace of this tightening cycle remains gradual and moderate. (Jinshi)