Group 1 - The Federal Reserve has restarted interest rate cuts, with the 10-year U.S. Treasury yield briefly falling below 4.0% [1][3] - Since the early 1970s, the Federal Reserve has experienced 12 interest rate cut cycles, with 5 occurring in a soft landing environment and 7 in a hard landing context [5][6] - In soft landing scenarios, the average interest rate cut is about 234 basis points (bps) over an average duration of 9 months, while in hard landing scenarios, the average cut is 647 bps over 20 months [5][6] Group 2 - The macroeconomic logic behind different interest rate patterns is influenced by the nature of the economic landing, affecting the slope and space of U.S. Treasury yields [2][27] - In preventive rate cuts, the decline in Treasury yields is smaller and rebounds sooner, while in recessionary cuts, the recovery in yields occurs later [2][28] - The low point of the 10-year Treasury yield is often associated with the pace of rate cuts, with faster cuts leading to earlier lows [2][28] Group 3 - Despite the restart of rate cuts, the potential for further declines in the 10-year Treasury yield may be limited due to rising long-term nominal neutral rates in the range of 3-3.5% [3][50] - The market has priced in 4-5 rate cuts by the end of 2026, but economic forecasts suggest the Fed may only cut rates once if inflation remains above target [3][50] - The increase in term premium is expected to dominate the direction of long-term Treasury yields, with significant upward pressure from debt supply expansion and policy uncertainty [3][56]

Group 1: Federal Reserve Actions - The Federal Reserve lowered interest rates by 25bps as expected during the September FOMC meeting, with indications of two more rate cuts within the year and an additional cut next year, which is more hawkish than market expectations[2] - Following the FOMC meeting, the 10-year U.S. Treasury yield rose by 6.31bps to 4.127%, while the 2-year yield increased by 1.59bps to 3.572%[3] - The market initially reacted to a more dovish 2025 dot plot but later adjusted to a more hawkish outlook for 2026, influenced by Powell's statements[3] Group 2: Market Reactions - The S&P 500 and Nasdaq indices rose by 1.22% and 2.21% respectively, driven by the Fed's rate cut and positive developments in U.S.-China TikTok negotiations[3] - The U.S. dollar index increased by 0.10% to 97.64, reflecting a mixed response to the Fed's actions and economic data[3] - Gold prices initially rose by 1.16% to $3685 per ounce but later declined, indicating volatility in response to the Fed's hawkish stance[3] Group 3: Economic Indicators - U.S. retail sales for August increased by 0.6%, surpassing expectations of 0.2%, with core retail sales (excluding autos) rising by 0.7% against a forecast of 0.4%[3] - Initial jobless claims for the week ending September 13 fell to 231,000, below the expected 240,000, indicating a strengthening labor market[3] - The Atlanta Fed's GDPNow model predicts a Q3 2025 GDP growth of 3.3%, while the New York Fed's Nowcast model estimates it at 2.1%[3] Group 4: Political Risks - The failure of temporary spending bills in the Senate raises the risk of a federal government shutdown on October 1, increasing political uncertainty in the market[4] - The potential for Trump to gain more influence over the Federal Reserve could lead to a shift from a data-dependent to a Trump-dependent policy framework, impacting future monetary policy decisions[4]

Group 1 - The Federal Reserve has restarted interest rate cuts, with the 10-year U.S. Treasury yield briefly falling below 4.0% [1][3] - Since the early 1970s, the Federal Reserve has experienced 12 interest rate cut cycles, with 5 occurring in a soft landing environment and 7 in a hard landing context [5][6] - In soft landing scenarios, the average interest rate cut is about 234 basis points (bps) over an average duration of 9 months, while in hard landing scenarios, the average cut is 647 bps over 20 months [5][6] Group 2 - The macroeconomic conditions determine the slope and space of the decline in U.S. Treasury yields, with preventive cuts resulting in smaller declines and earlier rebounds [2][27] - The low point of the 10-year Treasury yield often occurs 1-2 months before or after the last rate cut in preventive cut scenarios [28][75] - The timing of the low point in Treasury yields is closely related to the pace of interest rate cuts, with faster cuts leading to earlier lows [2][75] Group 3 - Despite the restart of interest rate cuts, the potential for further declines in the 10-year Treasury yield may be limited due to the rise in the long-term nominal neutral interest rate to the 3-3.5% range [3][50] - The market has priced in 4-5 rate cuts by the end of 2026, but the Federal Reserve may only cut rates once if the PCE inflation is projected at 2.6% and unemployment at 4.4% [3][50] - The increase in term premium is expected to dominate the direction of long-term Treasury yields, with the term premium rising to around 0.9% in 2025 due to expanded debt supply and policy uncertainty [3][56]

Core Viewpoint - The independence of the Federal Reserve is facing significant challenges, particularly due to the Trump administration's attempts to influence its leadership and monetary policy decisions [2][3][5]. Group 1: Federal Reserve Leadership Changes - The Trump administration plans to appeal a court ruling that prevents the removal of Federal Reserve Governor Lisa Cook, highlighting ongoing tensions regarding the independence of the Fed [1]. - Stephen Milan, nominated by Trump, has taken office and participated in the Fed's September interest rate decision, indicating a shift in the Fed's dynamics [1]. - Trump's potential nomination of a more dovish Fed chair next year could further influence the Fed's monetary policy direction [1][6]. Group 2: Implications for Monetary Policy - Analysts suggest that Trump's interventions may lead to a more dovish monetary policy, with potential interest rate cuts exceeding current market expectations [7]. - The Fed's independence is crucial for maintaining predictable interest rate paths, and any political pressure could undermine this stability [8]. - The risk of inflation may increase if the Fed aligns its policies with Trump's preferences, potentially leading to a repeat of the inflationary trends seen in the 1970s [3][4]. Group 3: Market Reactions and Economic Impact - The challenges to the Fed's independence may result in higher risk premiums for U.S. dollar assets, affecting investor confidence [8][9]. - The yield curve for U.S. Treasury bonds may steepen, with short-term rates declining more significantly than long-term rates due to changing market expectations [8]. - Concerns over fiscal sustainability and monetary independence could lead to a decline in the dollar's credit risk, prompting a shift away from the dollar by international investors [9].

Group 1 - UBS analysts suggest that the European Central Bank's rate-cutting cycle may have ended, with expectations to maintain the deposit rate at 2% during the September policy meeting. This is based on anticipated large-scale fiscal stimulus from the EU, including increased defense spending and infrastructure investment in Germany, which are expected to support the economy starting in early 2026 [1] - Saxo Bank reports that silver prices have surpassed $40 per ounce for the first time since September 2011, driven by macroeconomic support, industrial demand growth, and supply shortages. The current price is $40.70 per ounce, with expectations that rising US rate cut expectations will continue to boost silver alongside gold [1] - ING analysts indicate that the upcoming US non-farm payroll report will significantly influence gold prices, which have been on an upward trend. A weak report could strengthen the view that the Federal Reserve is likely to cut rates in September [2][3] Group 2 - MUFG analysts predict that a weak US non-farm payroll report could lead to further declines in the dollar and potentially prompt the Federal Reserve to cut rates by 50 basis points in September, with current market expectations leaning towards a 25 basis point cut [3] - Societe Generale highlights that the pound is facing downward pressure due to high inflation and low growth in the UK, presenting challenges for the Bank of England's policy [5] - CICC forecasts that US inflation pressures may continue to rise, suggesting that if rate cuts occur during high inflation periods, it could lead to a steepening of the yield curve, with the 10-year rate potentially reaching 4.8% by year-end [6] Group 3 - Huatai Securities emphasizes that the likelihood of a Federal Reserve rate cut in September could drive down real interest rates, benefiting gold investments. They suggest that unless the US economy returns to a high-growth, low-inflation scenario, the upward trend in gold prices may persist [6] - CITIC Securities notes that the recent appreciation of the RMB against the USD may require additional catalysts to break the 7 level, with current market conditions providing support for the currency [7] - CITIC Securities also indicates that the bond market's pricing may reflect a more dominant domestic influence, suggesting that the relationship between equity and bond markets is not necessarily oppositional [8] Group 4 - CITIC Jinpu reports that lithium carbonate production in China reached a new high of over 85,000 tons in August, with a 5% month-on-month increase and a 39% year-on-year increase. The downstream demand is entering a traditional peak season, providing support for lithium prices [9]

Core Viewpoint - The article discusses the implications of Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole meeting, indicating a shift towards a more dovish monetary policy stance due to rising unemployment risks and a reassessment of inflation dynamics [2][3]. Summary by Sections Jackson Hole Meeting Insights - The annual Jackson Hole meeting serves as a platform for central bank leaders to outline future monetary policy directions, with Powell's speech focusing on the review of the monetary policy framework [2]. Shift to Dovish Stance - Powell's remarks suggest an increased concern over rising unemployment risks in a weak labor market, indicating a potential for a swift rise in unemployment rates [3]. - He downplayed previous concerns regarding tariffs' impact on persistent inflation, suggesting that any price level changes are likely to be one-time events rather than ongoing inflationary pressures [3]. Future Monetary Policy Adjustments - Powell's speech indicates a potential adjustment in policy stance if inflation data does not show significant increases, with market expectations leaning towards at least two rate cuts by the end of the year [3]. Long-term Interest Rate Dynamics - The article highlights that a decrease in short-term policy rates does not necessarily lead to a reduction in long-term U.S. Treasury yields, citing factors such as strong household balance sheets and expanding fiscal deficits [4]. - The yield curve has shown a steepening trend since the Jackson Hole meeting, with the spread between 10-year and 2-year Treasury yields increasing by 10 basis points [4].

Group 1 - The core CPI in the US for July 2025 ended a five-month streak of underperformance, with a month-on-month increase of 0.2%, aligning with expectations, while core CPI rose by 0.32% [1] - The US economy is facing uncertainties, with signs of weakening consumer market momentum and cautious corporate investment, leading to speculation that the Federal Reserve may consider interest rate cuts despite current inflation data [1] - Market expectations have shifted towards a "rate cut anticipation leading to a reinforced soft landing expectation," resulting in declines in the 2-year Treasury yield and the dollar index, while 10-year TIPS, 10-year Treasury yields, and US stocks have risen [1] Group 2 - The July PPI data indicates that tariff pressures may have been transmitted to US wholesalers, with a month-on-month increase of 0.95%, significantly exceeding the expected 0.2%, and core PPI rising by 0.92%, the highest since 2022 [2] - The impact of tariffs on wholesale, retail, and end-consumer prices remains uncertain, and the market's expectation for a September rate cut is not guaranteed due to the variability in data quality [2] - In optimistic scenarios, the Federal Reserve may cut rates twice this year, while in pessimistic scenarios, only once in October; looking ahead to mid-2026, a new Fed chair may lead to a more accommodative monetary policy with potential rate cuts ranging from 4 to 6 times next year [2] Group 3 - Prior to the September FOMC meeting, the dollar index and 2-year Treasury yield are expected to rise, reflecting a correction of overly optimistic rate cut expectations [3] - Following the September FOMC, market bets on rate cuts in 2026 are anticipated to increase, with concerns about the Fed's independence and debt sustainability likely to widen the yield spread between 2-year and 10-year Treasuries [3] - Recent discussions between Trump and Putin regarding the Russia-Ukraine conflict may enhance short-term market risk appetite, potentially leading to downward pressure on gold prices as safe-haven sentiment diminishes [3]

Group 1: CPI Expectations - July CPI is expected to rise, with Bloomberg analysts predicting a month-on-month increase of +0.2% and a year-on-year increase of +2.8%[2] - Core CPI is forecasted to increase by +0.3% month-on-month and +3.0% year-on-year[2] - The Federal Reserve's Inflation Nowcasting predicts a month-on-month increase of +0.16% for CPI and +0.24% for core CPI, with year-on-year increases of +2.72% and +3.04% respectively[2] Group 2: Market Reactions - The expectation of a rate cut has increased due to geopolitical easing, leading to a rise in U.S. stock markets, with the S&P 500 and Nasdaq gaining 2.43% and 3.87% respectively[3] - U.S. Treasury yields rose, with the 10-year yield increasing by 6.7 basis points to 4.283% and the 2-year yield rising by 8.1 basis points to 3.762%[3] - The dollar index decreased by 0.97% to 98.18, while spot gold prices rose by 1.02% to $3,397 per ounce[3] Group 3: Economic Indicators - The ISM Services PMI for July recorded at 50.1, below the expected 51.5, indicating a slowdown in service sector growth[3] - New orders fell to 50.3 and the employment index dropped to 46.4, suggesting weakening demand in the services sector[3] - The New York Fed's consumer survey indicated a one-year inflation expectation of 3.09%, up from 3.02%[3] Group 4: Risks and Future Outlook - The implementation of tariffs may lead to further inflationary pressures, with the potential for CPI to rise in the coming months[4] - There is a risk that the Federal Reserve's rate cuts could lead to an inflation rebound if executed too aggressively[4] - The nomination of Stephen Milan to the Federal Reserve Board may increase internal disagreements regarding future interest rate paths[3]

Core Viewpoint - The report from CICC indicates that the U.S. economy showed signs of improvement in July after hitting a low in June, despite a rebound in the dollar index since July. The tightening of dollar liquidity and the impact of tariffs on inflation may negatively affect U.S. stock performance in August and September, while the 10-year Treasury yield is expected to rise to around 4.8% in the near term. However, the long-term outlook remains positive for risk assets due to potential dollar liquidity easing and fiscal support for the economy [1][2][16]. Group 1: Dollar Index and Market Dynamics - The dollar index reflects various factors including cross-border capital flows, fundamentals, and dollar liquidity. Its fluctuations indicate a structural bear market for the dollar amidst ongoing capital rebalancing between the U.S. and other markets [2][4]. - The dollar index has maintained strength despite the widening U.S. fiscal and trade deficits over the past two years, driven by continued capital inflows into U.S. assets underpinned by AI-related market confidence [2][4]. Group 2: Economic Indicators and Labor Market - Following a structural depreciation in April, the dollar index regained positive correlation with the U.S.-Germany yield spread from May, reflecting the recovery of the U.S. economy in July after a downturn from April to June [6][7]. - High-frequency data indicates that unemployment claims rose significantly from April to June, peaking at 1.95 million, corresponding to an unemployment rate of 4.3%. However, new job openings showed a recovery starting in July [9][10]. Group 3: Liquidity and Debt Issuance - The liquidity situation shifted from easing to tightening as the Treasury General Account (TGA) began releasing funds to replenish reserve accounts, with a significant increase in net debt issuance in July amounting to $308.3 billion compared to $104.9 billion from April to June [12][14]. - The Treasury is projected to issue $1 trillion in net debt from July to September, with long-term debt issuance reaching $470 billion, which may lead to financial risks and market volatility [20][21]. Group 4: Inflation and Economic Outlook - The potential for inflation is increasing as the impact of tariffs on import costs becomes more apparent, coupled with strong wage growth and low inflation base effects [16][18]. - The report suggests that if the U.S. economy remains stable with rising inflation and tightening dollar liquidity, Treasury yields are unlikely to stay low, which could adversely affect the real estate and manufacturing sectors [21][22]. Group 5: Future Market Trends - The report anticipates potential adjustments in risk assets over the next couple of months due to tightening liquidity and rising inflation, particularly affecting growth sectors, while financial, real estate, and industrial sectors may remain resilient due to policy support [22]. - The long-term trend suggests that fiscal dominance may lead to renewed liquidity and continued improvement in fundamentals, maintaining an upward trajectory for the market despite short-term adjustments [22].

Core Viewpoint - The article discusses the fluctuations in the US economy and the impact of various factors such as monetary policy, fiscal measures, and international trade on market performance, suggesting that while there may be short-term adjustments, the long-term outlook for risk assets remains positive due to potential liquidity easing and fiscal support [2][18][25]. Group 1: Economic Conditions - The US economy is believed to have bottomed out in June and showed signs of improvement in July, with a debt issuance wave beginning in July to absorb dollar liquidity [2][18]. - The impact of tariffs on inflation is expected to gradually manifest, potentially affecting US stock performance negatively in August and September [2][18]. - The 10-year US Treasury yield is projected to quickly bottom out and rise to around 4.8% [2][18]. Group 2: Dollar Index and Liquidity - The dollar index reflects cross-border capital flows, fundamentals, and dollar liquidity, maintaining strength despite the US's fiscal and trade deficits due to ongoing capital inflows driven by AI investments [3][4]. - Following a structural depreciation in April, the dollar index has shown a recovery since May, correlating with the decline in the US-German yield spread [7][9]. - A significant increase in net debt issuance occurred in July, totaling $308.3 billion, compared to only $104.9 billion from April to June [13][15]. Group 3: Inflation and Fiscal Policy - The risk of inflation is increasing as the impact of tariffs on import costs becomes more apparent, alongside strong wage growth and low inflation base effects [18][20]. - The Treasury is expected to issue $1 trillion in net debt from July to September, with long-term debt issuance reaching $470 billion, which may lead to financial risks and market volatility [22][24]. - The potential for a "new accord" between fiscal and monetary policy could lead to renewed dollar liquidity and improved performance of risk assets in the long term [25].