The US is set to release the July CPI data, a highly anticipated economic indicator, on August 12 at 20:30 (Beijing time). Market analysts generally expect that the year-on-year CPI for July may rise slightly from 2.7% in June to 2.8%, while the core CPI year-on-year may return to above 3.0%.

It is worth noting that the month-on-month increase in core CPI is expected to reach 0.3%-0.4%, setting a new high in nearly half a year. The main driving factors behind this upward trend include the deepening impact of tariff policies and adjustments to statistical models.

The impact of tariff policies is gradually becoming apparent, especially in sectors with high import dependence, such as clothing and home appliances. The average tariff rate of 18.4% has led to a significant increase in the prices of these goods. Furthermore, tariffs on intermediate goods may trigger persistent inflationary pressures.

Another factor worth noting is the adjustment of statistical methods. Previous seasonal adjustment models may have underestimated the actual inflation level by about 20 basis points. Starting in July, the new data model will more accurately reflect the true price pressures.

Under the combined influence of these factors, if inflation data exceeds expectations, it may affect the market's current optimistic expectations for a rate cut by the Federal Reserve in September. The Federal Reserve may face a "stagflation" dilemma: economic growth is slowing, but inflationary pressures are rising, which may lead to increased uncertainty regarding the pace of rate cuts.

For China, insufficient domestic demand remains a major economic challenge it currently faces. Against the backdrop of increasing uncertainty in the global economic environment, how to stimulate domestic demand and balance economic growth with inflation control will become an important issue that policymakers need to weigh.

As the U.S. CPI data is about to be released, global financial markets will closely monitor this important economic indicator to assess the potential future economic direction and adjustments to monetary policy. Investors and policymakers need to remain vigilant and be prepared to respond to potential market fluctuations.