The report released by the Bank of Communications International Bank pointed out that following the strong growth in non-farm data in December, CPI data has become the focus of the market. After the sharp rise in US bond yields, CPI data will undoubtedly further amplify the volatility of the already fragile capital market. The nominal CPI in December met expectations, while the slowdown in core CPI, especially core service inflation data, has clearly eased market tension. However, the temporary slowdown in inflation may have limited soothing effects on the market, and medium-term upward risks are still not optimistic. The Bank of Communications International Bank stated that in December 2024, the US CPI increased by 2.9% year-on-year, in line with expectations and the previous month was 2.7%; month-on-month, it increased by 0.4%, higher than the expected 0.3% and the previous month's 0.3%. In December, core CPI increased by 3.2% year-on-year, in line with expectations and the previous value was 3.3%; month-on-month, it increased by 0.2%, in line with expectations and the previous month was 0.3%. After the unexpected decline in inflation data in December, the market's expectations of skipping rate cuts in January have hardly changed. Compared to the strong non-farm data announced last week, the market has advanced its bets on the timing of rate cuts in 2025 - from September to June, but bets on rate cuts for the whole year still range from 1 to 2 times. The Federal Reserve will hold the January FOMC meeting next week. Given the strong non-farm data and the slowdown in inflation data, skipping rate cuts in January is the baseline scenario. There is a significant divergence among Federal Reserve officials on rate cuts. Although most officials have recently stated that they will slow down rate cuts and will observe based on data, the current policy interest rate is still high and restrictive. The Federal Reserve is still expected to cut rates opportunistically.