The divergence in bulk prices has caused PPI and CPI to rise and fall respectively. "Export grabbing" is expected to support the performance of export growth by the end of the year, and the Federal Reserve may continue to cut interest rates by 25 basis points in December---1210 Macro Dehydration

International oil prices have fallen, and the prices in the midstream and downstream sectors are significantly oversold, while inflation recovery still faces constraints. Regarding PPI, if Trump encourages the release of U.S. crude oil production, there is a significant risk of oversupply next year, which will suppress domestic inflation. In addition, the midstream and downstream PPI is expected to continue to show a "significant overselling" phenomenon relative to upstream bulk prices, with an expected year-on-year PPI central tendency of -1% next year. As for CPI, the overselling of midstream and downstream PPI has a more direct impact on CPI, and the "trade-in" policy will also suppress CPI readings, with an expected year-on-year CPI central tendency of around 0.4% next year.

The year-on-year export growth rate in November has slowed down. Major trading partners continue to contribute positively to the year-on-year export growth rate. There is strong uncertainty in the U.S. policy environment next year. "Export grabbing" is expected to support export growth performance at the end of the year.

A continued interest rate cut of 25 basis points in December remains the basic scenario. Although Federal Reserve Chairman Powell recently stated that there is no rush to cut interest rates quickly, this is mainly aimed at stabilizing market expectations, especially since the overall financial conditions are relatively loose. It is expected that the Federal Reserve will maintain a relatively stable pace of interest rate cuts in the first half of 2025, and as the policy rate approaches the neutral rate in the second half of 2025, the pace of rate cuts may gradually slow down