CICC Expects Fed to Raise Rates by 25 Basis Points on Sept. 16

CICC Research expects the Federal Reserve to raise interest rates by 25 basis points at its Sept. 16 meeting after the latest U.S. inflation data met the threshold for a rate hike. U.S. August CPI rose 0.4% month over month, up from 0.1% in July, and 3.4% year over year, unchanged from the previous month. Core CPI increased 0.3% month over month and 2.4% year over year, slightly above market expectations. CICC said the Fed may lower its unemployment-rate forecast, raise its inflation projections and lift its 2027 and 2028 interest-rate paths, signaling that tighter policy could persist longer. A more hawkish scenario would involve another rate hike later this year or next year, potentially prompting markets to reprice for a longer tightening cycle.