The market safely passed the first major test of the week. The just released December CPI data for the United States showed that the year-on-year and month on month CPI was in line with expectations, while the core CPI was lower than expected. As we discussed yesterday, the Cleveland Fed's real-time inflation forecast was slightly lower than expected, and the winning rate has once again increased. The significance of December inflation data lies in: 1. The 12 data is seen as a more convincing signal of inflation cooling. Although the November data showed that core inflation had dropped to a four-year low year-on-year, the limited statistical scope due to the long-term government shutdown and the failure to collect key project prices such as housing in a timely manner have questioned the reference value of the data for that month. So December data has become the most important reference for everyone to observe the trend of inflation 2. Structurally, commodity prices remained relatively stable, while service and food prices became the main sources of inflation for the month. Core commodity prices have experienced deflation on a month on month basis, while service prices have slightly accelerated. The year-on-year growth rate of the indicator that the Federal Reserve has long been concerned about - "super core inflation" (excluding housing service prices) - continues to slow down, reaching its lowest level since September 2021. From a trend perspective, the core CPI is still in a clear downward channel (see Figure 2 below) 3. The biggest significance of this data is not that it can immediately push the Federal Reserve to cut interest rates in January, but at least it can largely dispel concerns about a sustained rebound in inflation. As for the pace of interest rate cuts by the Federal Reserve, what is the outlook for the 26th year at the beginning of the month? Https://(x.com)/qinbank/status/2008711857323077849? As discussed in s=46&t=k6rimWs Ebo2D2TXolYcM-A, the three interest rate meetings before the end of Chairman Powell's term should be treated as a whole, and there may be one interest rate cut without expecting more.