Core Viewpoint - The equity market is showing positive signs with all three major averages on track for record closes, and there is optimism about achieving a target of 6800 for the S&P 500 by the end of 2025, which is approximately 2% above current levels [1][2]. Group 1: Federal Reserve Insights - The Federal Reserve's recent signals indicate a lower real Fed funds rate, which is the nominal rate minus projected interest rates for the coming years, suggesting a favorable environment for equities [5][6]. - Historical patterns show that when the market has high expectations for the Fed, and the Fed adjusts its stance slightly, it often leads to positive equity performance in the following quarters [4][5]. Group 2: Market Risks - Concerns exist regarding a potential "growth scare," which is characterized by anxiety around a recession that does not materialize, potentially leading to increased volatility and a 7-8% pullback in equities [8][9][16]. - The likelihood of a growth scare occurring in the next few months is estimated at about one-third, which could result in a rally in the bond market as equities face challenges [9][10]. Group 3: Portfolio Strategy - In light of the current market conditions, it is suggested that investors maintain long positions in equities while also holding an overweight position in bonds to mitigate risks [10][16]. - The historical context of growth scares indicates that while equities may experience volatility, they tend to perform well over the long term, necessitating a balanced approach to portfolio construction [12][16].

Group 1 - The Federal Reserve announced a 25 basis point cut in the federal funds rate target range to 4.00% to 4.25%, marking the first rate cut of 2025 and following three cuts in 2024 [2][3] - The nature of the rate cut is categorized as a preventive cut, aimed at preemptively addressing potential economic risks rather than responding to a severe economic downturn [3][8] - Historical analysis shows that preventive rate cuts generally have a positive impact on the U.S. stock market, reducing corporate financing costs and potentially stimulating mergers and acquisitions [4][5] Group 2 - The current economic environment is characterized by "stagflation," with a GDP growth rate of 2.4% in Q4 2024, indicating a gradual slowdown but not a clear recession [8][9] - The inflation rate remains relatively high, with core PCE and CPI growth rates at 2.86% and 3.2% respectively, complicating the effectiveness of the current rate cut [8][10] - The first phase of the current rate cut cycle has not met expectations, with the stock market showing weak performance despite multiple rate cuts [9][10] Group 3 - There has been a significant outflow of funds from the U.S. stock market, with approximately $259 billion exiting in the first half of the year, primarily moving to safer assets like bonds and money markets [13][15] - Non-U.S. markets, particularly in China and Europe, have seen increased foreign investment, with China experiencing a net increase of $10.1 billion in foreign holdings of stocks and funds in the first half of 2025 [14][15] - The trend of capital outflow from U.S. equities is viewed as a rebalancing of asset allocation rather than a mass exodus, reflecting investor caution regarding the U.S. economy and high valuations [15][16] Group 4 - The potential impact of the Fed's second phase of rate cuts on global markets will depend on whether the Fed adopts a moderate preventive approach or a more aggressive easing strategy [17][18] - If the Fed continues with a moderate approach, U.S. stock market funds are likely to remain within the domestic financial system, while some capital may seek opportunities in global markets [17][18] - An aggressive easing strategy could lead to a temporary boost in global markets due to increased liquidity, but risks of a sharp capital outflow could arise if inflation pressures force the Fed to tighten policy [18][19]

Group 1 - The U.S. GDP growth rate for Q2 was revised up from 3.0% to 3.3%, but this figure does not reflect the actual economic conditions faced by households [1][3] - Consumer spending, which accounts for nearly 70% of GDP, increased from 2.3% to 2.9% in Q2, raising questions about whether this spending is based on earned income or borrowed funds [3][5] - Household credit card debt reached a record high of $1.14 trillion, with interest rates at 20.92%, the highest since 1994, indicating that many consumers are relying on credit to meet basic needs [5][7] Group 2 - Business fixed investment decreased from 3.5% to 3.1%, with equipment investment at only 1.8%, significantly below the historical average of 3.5%, suggesting a lack of confidence in future economic conditions [8][12] - Companies are holding excess inventory as a defensive strategy rather than investing in growth, with capital formation at only 16.8% of GDP, the lowest in five years [12][14] - Despite low unemployment rates, real wage growth has slowed for four consecutive months, indicating that purchasing power is declining, which could lead to future economic challenges [25][31] Group 3 - The Federal Reserve's interest rate hikes have a lagging effect on the economy, with the impact of previous rate increases now becoming apparent, contributing to financial pressures on households and businesses [18][20] - Historical data shows that achieving a "soft landing" after rate hikes is rare, and current structural issues in the economy, such as high household debt and low business investment, complicate the outlook [20][21] - The perception of a strong job market is misleading, as many companies are quietly laying off employees or freezing hiring, indicating preparation for potential economic downturns [25][27]

Core Viewpoint - The September FOMC meeting highlighted the risks of employment slowdown and raised the expectation for interest rate cuts in 2025, indicating a cautious but dovish stance from the Federal Reserve [1][2][3]. Economic Predictions - The FOMC's statement emphasized the risks of employment decline, removing the phrase "labor market remains robust" and adding concerns about "slowing job growth" and "increased risks to employment" [2]. - Economic forecasts were improved, with GDP projections for 2025, 2026, and 2027 raised, while the unemployment rate for 2026 and 2027 was slightly lowered. The core PCE forecast for 2026 was also increased [2]. Interest Rate Projections - The dot plot indicated an increase in the expected number of rate cuts in 2025 from 2 to 3, with further divergence in future expectations among FOMC members [2]. - The FOMC members anticipate 2 more cuts this year, 1 cut in 2026, and 2 cuts in 2027, reflecting increasing internal disagreement [2]. Powell's Statements - Chairman Powell described the rate cut as a "risk management cut," indicating no need for a significant reduction at this time and emphasizing that future decisions will depend on data [3]. - Powell noted that while the unemployment rate remains low, it has begun to rise, attributing the slowdown in job growth to factors such as reduced immigration and declining labor force participation, as well as potential impacts from AI [3]. Market Reactions - Following the FOMC announcement, U.S. Treasury yields rose, and stock markets showed mixed results, with gold prices declining. The market reacted to Powell's cautious tone regarding future rate cuts and the balance between employment and inflation targets [4]. - CME data indicated increased market confidence in two more rate cuts this year, although expectations for cuts in 2026 were pushed back [4]. Future Rate Cut Scenarios - Three potential scenarios for future rate cuts were outlined: 1. **Soft Landing Scenario**: The U.S. economy achieves a soft landing without major recession or stagflation, with two more cuts this year and three in 2025, influenced by political pressures [5][6]. 2. **Recession Scenario**: A significant economic downturn occurs, leading to a sharp rise in unemployment or a stock market crash, prompting the Fed to implement substantial cuts [5]. 3. **High Inflation Scenario**: A historic high inflation or stagflation situation forces the Fed to prioritize inflation control, maintaining high rates for an extended period [6]. - The soft landing scenario is considered the base case with the highest probability, while the recession and high inflation scenarios are viewed as less likely at this time [6].

Core Viewpoint - The Federal Reserve's decision to cut interest rates by 25 basis points marks the beginning of a new easing cycle, which is expected to influence various asset classes and encourage a shift of savings from deposits to capital markets [2][4][6] Group 1: Impact on Financial Markets - The Fed's rate cut is anticipated to lead to a decline in domestic deposit rates, prompting a significant shift of household savings towards capital markets [4][5] - Historical trends suggest that U.S. equities generally maintain an upward trajectory following rate cuts, except in scenarios of recessionary rate cuts [3][6] - The yield on U.S. Treasury bonds is expected to continue its downward trend, while the dollar index may experience short-term weakness but lacks a consistent long-term pattern [3][6] Group 2: Market Reactions - Following the announcement, major U.S. stock indices initially surged but then quickly retreated, indicating market volatility [4][5] - The dollar index saw a significant drop but rebounded towards the end of the trading session, ultimately closing higher [4] - Chinese stocks listed in the U.S. experienced notable gains, particularly among well-known Chinese companies [4] Group 3: Economic Predictions - The Fed's decision aligns with market expectations, with projections indicating two more rate cuts by the end of the year [6][9] - Economic forecasts have been adjusted, with GDP and inflation expectations raised, while unemployment rate predictions have been lowered [6][7] - The current economic environment suggests that the rate cut is more of a preventive measure rather than a response to an immediate crisis [8][9] Group 4: Investment Strategies - Ordinary investors are encouraged to increase their allocations to stocks and funds to enhance expected returns, as equity assets in China are becoming more attractive [5] - A recommended allocation of approximately 20% to gold assets is suggested to maintain value amidst market fluctuations [5] - The potential for a global wave of central bank rate cuts is highlighted, with the Chinese central bank having significant room for monetary easing to support the economy [4][5]

Core Viewpoint - The article argues that Federal Reserve Chairman Jerome Powell's decision to cut interest rates, despite the absence of clear recession signals, represents a high-risk policy gamble aimed at demonstrating the Fed's independence and fulfilling its dual mandate [2][9]. Economic Context - Powell faces unprecedented political opposition and economic uncertainty as his term nears its end, making current policy decisions more complex and risky than ever before [2][3]. - The decision to lower rates is largely influenced by significant slowdowns in the labor market, with average job growth for August revised down from 150,000 to 29,000, indicating substantial underlying weakness [4]. Political Pressure - The Fed is navigating extraordinary challenges to its traditional independence while addressing issues like slowing growth and persistent inflation, complicating policy decisions [3][6]. - Powell has managed to maintain consensus within the Fed despite differing views on the economic outlook and significant political pressure [6][8]. Future Outlook - The Fed's interest rate predictions reveal potential for ongoing contentious debates, with some members believing no further rate cuts are necessary this year, while others advocate for additional cuts [8]. - Powell acknowledges the dual risks of labor market weakness and stubborn inflation, indicating that there are no risk-free paths forward [8]. Historical Context - The article outlines three potential outcomes of Powell's policy gamble, referencing historical precedents where early rate cuts either led to successful economic soft landings or contributed to prolonged inflationary pressures [11][12]. - Past instances of rate cuts in 1990, 2001, and 2007 failed to prevent recessions, highlighting the limitations of monetary policy [12].

Core Viewpoint - The article argues that Powell is engaging in a high-risk policy gamble by choosing to cut interest rates without clear signs of an impending recession, marking his third attempt at such a delicate maneuver during his tenure [2][3]. Economic Context - The decision to lower interest rates is largely attributed to a significant slowdown in the labor market, with revised data showing that the average job growth for three months in August dropped from an initial report of 150,000 to 29,000, indicating substantial underlying weakness [3]. - Some economists believe that the Federal Reserve's actions, including the recent 50 basis point cut, are not aggressive enough to address the current economic challenges [3]. Structural Changes and Risks - There are concerns that the Federal Reserve may misinterpret structural changes in the economy as temporary cyclical weakness, which could lead to excessive rate cuts [4]. - Policies from the Trump administration, such as immigration restrictions and increased tariffs, may be permanently altering the economy's production capacity, raising fears about the risks of over-lowering interest rates [4]. Political Pressure and Consensus - Powell faces significant political pressure while trying to maintain consensus within the Federal Reserve, which is a major test of his leadership [5]. - Despite differing views on the economic outlook, Powell has managed to keep the consensus intact, with three regional Federal Reserve bank presidents supporting the recent rate cut [5]. Future Challenges and Opportunities - The Federal Reserve is likely to face more contentious debates regarding interest rate predictions, with some members believing no further cuts are necessary this year [7]. - Powell acknowledges the dual risks of labor market weakness and persistent inflation, indicating that there is no risk-free path forward [7]. Historical Context and Potential Outcomes - The article outlines three potential outcomes of Powell's policy gamble, including the ideal scenario of a "soft landing" similar to the mid-1990s, the risk of igniting inflation similar to the late 1960s, and the historical failures of rate cuts to prevent recessions in 1990, 2001, and 2007 [8].

Group 1 - The Federal Reserve's September FOMC meeting resulted in a 25 basis point cut to the federal funds target rate, marking the first rate cut of the year, with expectations for two more cuts in 2025 [1][8] - The FOMC statement highlighted the risks of slowing employment growth, removing previous language indicating a solid labor market, and introducing concerns about downside risks to employment [1][8] - Economic projections were adjusted, with GDP forecasts for 2025, 2026, and 2027 being raised, while unemployment rates for 2026 and 2027 were slightly lowered [9][10] Group 2 - Chairman Powell described the rate cut as a "risk management cut," indicating that there was no need for a significant reduction in rates and that future rate paths remain uncertain [2][13] - Powell noted that while the unemployment rate is still low, it has begun to rise, and employment growth is slowing due to factors such as reduced immigration and declining labor force participation [2][13] - Inflation expectations were adjusted, with Powell suggesting that the impact of tariffs on inflation is likely to be temporary, although there are still concerns about persistent inflation risks [2][13] Group 3 - Market reactions included a rise in U.S. Treasury yields and mixed performance in the stock market, reflecting the cautious tone of Powell regarding future rate cuts [3][14] - Following the FOMC announcement, market confidence in two additional rate cuts this year increased, with the probability of the federal funds rate reaching a range of 3.5%-3.75% by year-end rising to 79.9% [15][16] Group 4 - Three potential scenarios for future rate cuts were outlined: 1. Soft landing scenario, predicting two more cuts this year and three in 2026, with a stable economic outlook [4][19] 2. Recession scenario, where significant economic deterioration could lead to a larger cut of 50 basis points [4][19] 3. High inflation scenario, where persistent high inflation would necessitate maintaining higher rates for a longer period [4][19] - The soft landing scenario is considered the most likely, while the probabilities for recession and high inflation scenarios are viewed as lower [20]

Core Viewpoint - The Federal Reserve lowered the federal funds rate by 25 basis points to a range of 4.00%-4.25%, marking the first rate cut since September 2024, which aligns with market expectations [2][3][4] Group 1: Federal Reserve's Rate Cut - The decision to cut rates was supported by many analysts, indicating it was anticipated by the market [2][3] - The Fed's dot plot suggests three rate cuts for the year, with the next expected in October and December [3][4] - The primary driver for the rate cut was weaker-than-expected non-farm payroll data, indicating a slowdown in the U.S. economy [3][4] Group 2: Economic Predictions and Market Reactions - The Fed raised GDP and inflation forecasts while lowering unemployment rate predictions [2][3] - Following the announcement, major asset prices experienced a V-shaped reversal, with little change in market expectations for future rate cuts [2][3] - The implied probability of a rate cut in October remains around 80%, with an average of 1.8 more cuts expected this year [2][3] Group 3: Divergence within the Federal Reserve - There are noticeable divisions within the Fed, with Chairman Powell seeking a suitable path for rate cuts amidst differing opinions [6][7] - The internal disagreements are exacerbated by external pressures, particularly from former President Trump, who has influenced Fed decisions through nominations [7][6] Group 4: Impacts on Financial Markets - Historical trends suggest that a Fed rate cut typically leads to an increase in stock prices, a decline in bond yields, and mixed effects on the dollar and gold prices [8][9] - The recent rate cut is expected to have a limited impact on asset performance due to already high market expectations [8][9] - The potential for a global wave of rate cuts may arise, with the Chinese central bank also having room for monetary easing [10]

Report Summary 1. Report Industry Investment Rating No information provided regarding the industry investment rating. 2. Core Views - The current expectation of interest rate cuts is the core driver for gold prices. US inflation and fundamental data are in line with this trend, causing gold prices to fluctuate at high levels. In the long - term, gold will still benefit from the contraction of the US dollar's credit [1][3]. - Although the continuous deterioration of non - farm data has temporarily suppressed the elasticity of silver prices, as the performance of US assets diverges and the market's trading of a soft landing continues to strengthen, silver prices are expected to challenge historical highs in the combination of a soft landing and interest rate cuts [3]. 3. Summary by Related Catalogs 3.1 Price Logic - **Gold**: The expectation of interest rate cuts is the core driver. The 2 - year US Treasury bond has priced in the expectation of three interest rate cuts this year. Attention should be paid to the guidance of the quarterly FOMC meeting on the subsequent path. The central bank's gold - buying behavior continues, and geopolitical conflicts have resurfaced, which is favorable for gold allocation. In the long - term, gold benefits from the contraction of the US dollar's credit [3]. - **Silver**: The continuous deterioration of non - farm data has temporarily suppressed silver's elasticity. However, as the US recession expectation weakens, the obstacle to silver's elasticity is removed. Silver prices are expected to challenge historical highs in the combination of a soft landing and interest rate cuts [3]. 3.2 Outlook Next week, focus on the FOMC meeting guidance and US retail data. The weekly range for spot London gold is [3500, 3800], and for spot London silver is [39, 45] [3]. 3.3 Key Information - China and the US delegations are holding talks in Madrid to resolve trade tensions, and the US and China are close to reaching an agreement on TikTok [2]. - A drone invaded Romanian airspace during a Russian attack on Ukrainian infrastructure, forcing Romania to scramble fighter jets [2]. - The Fed will hold a policy meeting on September 16 - 17. There are uncertainties regarding the attendance list due to a lawsuit to dismiss a Fed governor and a pending Senate approval for a new appointment [2]. 3.4 Index Information - On September 15, 2025, the comprehensive index of the CITIC Futures Commodity Index is not detailed. The commodity index is 2239.53, up 0.50%; the commodity 20 index is 2507.34, up 0.37%; the industrial products index is 2254.68, up 0.90% [46]. - The precious metals index on September 15, 2025, has a daily decline of 0.27%, a 5 - day increase of 0.29%, a 1 - month increase of 7.34%, and a year - to - date increase of 31.79% [48].