Core Viewpoint - The Federal Reserve has completed the voting for the reappointment of local Federal Reserve presidents ahead of schedule, alleviating concerns about potential political interference and ensuring the continuation of a hawkish stance within the Fed system [1][3]. Group 1: Hawkish Stance - The local Federal Reserve presidents represent the core hawkish force in the Fed's monetary policy-making. In a recent rate cut decision, two local Fed presidents voted against lowering the interest rate by 25 basis points to the range of 3.5%-3.75% [2]. - Four other officials indicated through the dot plot that they prefer maintaining borrowing costs at the previously set range of 3.75%-4% [2]. - This hawkish position contrasts sharply with calls from Trump and his economic advisors for significant rate cuts, as local Fed presidents continue to warn about the risks of rising inflation [2]. Group 2: Political Concerns - The early completion of the reappointment voting is viewed as a preventive measure against potential political interference, particularly in light of Trump's adversarial stance towards the Fed [3]. - The voting received unanimous support from the board, including Trump allies, which highlights the reduced direct political influence in the appointment process of local Fed presidents compared to board members who require presidential nomination and Senate confirmation [3]. Group 3: Reform Pressures - Despite the successful reappointment voting, local Fed presidents face ongoing reform pressures from the Trump administration. Treasury Secretary Yellen has been a vocal critic of the powers held by local Fed presidents [4]. - Yellen suggested that the government would push for reforms requiring all new local Fed presidents to reside in their service areas for three years prior to taking office, which could impact the pool of candidates for future appointments [4]. - The decision-making structure of the Fed includes 12 local Fed presidents participating in FOMC meetings, with only the New York Fed president holding permanent voting rights, while the others rotate annually [4].

Core Viewpoint - The market is in a wait-and-see mode ahead of the FOMC meeting, with gold prices experiencing fluctuations due to inflation concerns and expectations of a more hawkish stance from the Fed [3]. Market Performance - During the Asian trading session, February gold futures reported at $4229.1 per ounce, down by $7.1 [1]. - The overall market is calm as investors await the outcome of the FOMC meeting [1]. Gold Market Dynamics - Concerns over inflation have led to increased expectations for a hawkish approach from the FOMC and Powell, which has influenced market sentiment [3]. - Improved liquidity has reduced the cost of holding gold, contributing to a decline in the US dollar index and a decrease in the yield of 10-year US Treasury bonds, both of which are favorable for gold prices [3]. Trading Activity - Following the FOMC decision announcement, there was a significant increase in trading volume for COMEX gold futures, with a surge in buying activity pushing gold prices above the $4220 resistance level [3]. - The Commodity Futures Trading Commission plans to complete the backlog of position reports by the end of December, earlier than previously expected [3]. Technical Analysis - The next upward target for February gold futures is to close above the strong resistance level of $4433.00 per ounce, which is the contract high and historical record [3]. - The immediate resistance levels are identified at $4251.70 and $4285.00 per ounce, while the first support levels are at $4197.80 and $4150.00 per ounce [3].

Core Viewpoint - Deutsche Bank suggests that if Hassett becomes the Federal Reserve Chairman, his initial policy path may be more hawkish or neutral than expected, creating significant uncertainty for those betting on immediate large-scale monetary easing [1][4]. Group 1: Hassett's Potential Role - Hassett is seen as a strong candidate to replace Powell, with the Trump administration favoring him for his loyalty and alignment with their economic views [5][6]. - Hassett's background includes a PhD in economics and experience at the Federal Reserve, which positions him as a qualified candidate [7]. - His "outsider" status is viewed positively, aligning with recent calls for an independent review of the Fed's policies and operations [8][9]. Group 2: Challenges to Easing Policies - The report highlights three major challenges Hassett would face in implementing aggressive easing policies: 1. Difficulty in achieving internal consensus within the Fed, especially given the current economic climate [10]. 2. Economic fundamentals may not support significant rate cuts by mid-2026, as the economy is expected to grow steadily with limited downward risks in the labor market [12]. 3. The Fed's committee is largely hawkish, making it unlikely for members to agree on a clear easing stance, especially if Powell remains on the board [13][16]. Group 3: Market Implications - The expectation of a "rate cut feast" may not materialize, with policy adjustments likely to be gradual and restrained [14].

Group 1 - Dallas Fed President Logan issued a strong hawkish signal, opposing further rate cuts in December unless there is compelling evidence of declining inflation or a significant cooling in the labor market [1] - Logan emphasized that current inflation remains too high and is declining slower than expected, advocating for a slightly restrictive policy to ensure sufficient economic restraint [1] - In contrast, Fed Governor Milan argued that recent data supports further rate cuts, citing weakening inflation and labor market conditions [1] Group 2 - Kansas City Fed President Schmidt joined the hawkish camp, warning that further rate cuts could undermine the Fed's inflation credibility and that recent labor market weakness is due to structural factors [2] - Schmidt expressed concerns about inflation pressures from various sectors, advocating for stable rates and opposing recent rate cuts [2] - He also supported ending the balance sheet reduction process in December while suggesting measures to keep the Fed's balance sheet as small and non-distorting as possible [2] Group 3 - Boston Fed President Collins stated that rates should remain at current levels for some time to balance inflation above the Fed's 2% target and a weak labor market [3] - Other hawkish officials, including those from Chicago and Cleveland Feds, echoed similar sentiments, cautioning against further rate cuts [3] - Support for rate cuts came from officials like Milan, Miann, Waller, and Bowman, indicating a divided stance within the Fed [3]

Core Viewpoint - The market's interpretation of Federal Reserve Chairman Powell's recent statements as "hawkish" may be a misjudgment, as Barclays believes Powell's true intention is to correct the market's overconfidence in an imminent rate cut [1][2]. Group 1: Market Reaction - Following the October FOMC meeting, Powell indicated that inflation still faces upward pressure and that there is significant disagreement within the committee regarding a potential rate cut in December, suggesting that a cut is not guaranteed [1]. - The market reacted to Powell's comments with a sell-off in 2-year Treasury bonds, leading to a significant rise in yields and a decline in U.S. stocks [1]. Group 2: Barclays' Analysis - Barclays argues that the market's panic is a misinterpretation, asserting that Powell's intention is not a shift to a hawkish stance but rather to manage the market's overly certain expectations of a rate cut [1][2]. - The analysis team at Barclays views Powell's communication as a strategy to counter the market's assumption that a rate cut is inevitable regardless of economic data [2]. Group 3: Economic Data Insights - Recent economic data does not support a hawkish position; instead, it provides a basis for further rate cuts, with indicators showing a slowdown in labor demand [3]. - Powell acknowledged recent weak data on inflation, with core inflation indicators showing a downward trend. Barclays believes that once tariff impacts are excluded, the underlying core PCE inflation is close to the 2% target [5]. Group 4: Policy Implications - Barclays suggests that if potential inflation is only slightly above the target and the unemployment rate is marginally above the natural rate, then the policy setting should be neutral [8]. - Current market pricing reflects only a cumulative 55 basis points of rate cuts by June 2026, which Barclays considers overly one-sided [8][10].

Core Viewpoint - The likelihood of a rate hike by the Bank of Japan in October is diminishing, but the central bank will maintain a hawkish stance in the short term without feeling an urgent need to raise rates [1] Group 1: Interest Rate Policy - The Bank of Japan has already implemented a 60 basis point increase, which has led to a significant rise in long-term Japanese government bond yields [1] - The central bank is expected to act cautiously to avoid excessive tightening of the economy [1] Group 2: Economic Sentiment and Risks - Weak household confidence may limit the Bank of Japan's actions [1] - There is a potential risk of a sudden appreciation of the yen due to increasing policy divergence between the Federal Reserve and the Bank of Japan, which could negatively impact Japan's exports and asset markets [1]

Group 1 - Domestic precious metal futures showed a downward trend on September 18, with SHFE gold quoted at 824.54 CNY per gram, down 1.70%, and SHFE silver at 9823.00 CNY per kilogram, down 2.06% [1] - International precious metals also declined, with COMEX gold priced at 3670.30 CNY per ounce, down 0.66%, and COMEX silver at 41.65 USD per ounce, down 0.82% [1] - The opening prices for SHFE gold and silver were 835.34 CNY per gram and 9924.00 CNY per kilogram, respectively, with the highest prices reaching 839.00 CNY and 10009.00 CNY [2] Group 2 - The Federal Reserve lowered interest rates by 25 basis points, with projections indicating two more rate cuts this year, which is an increase from the previous forecast [3] - There was a contradiction in the Fed's statements, acknowledging a weakening labor market while also predicting rising inflation, leading to market volatility [3] - Following the Fed's dovish statement, U.S. Treasury yields initially fell, with the 10-year yield dropping below 4%, but later surged after Chairman Powell's remarks, increasing by 6.3 basis points [3] Group 3 - COMEX gold experienced significant volatility, closing at 3694.6 USD per ounce, down 0.82%, while SHFE gold closed at 832.64 CNY per gram, down 0.76% [4] - The price of gold reached new highs during the session but fell over 60 USD as the dollar strengthened, indicating weakened upward momentum for gold prices [4] - The market is expected to continue a high-level consolidation phase due to the hawkish tone of Powell's speech [4]

Core Viewpoint - The recent dissent within the Federal Reserve marks a significant shift in its traditionally consensus-driven decision-making process, influenced by external pressures such as President Trump's policies and rhetoric [1][3]. Group 1: Federal Reserve's Decision-Making - On July 30, two Federal Reserve rate setters, Christopher Waller and Michelle Bowman, voted against the majority to maintain interest rates at 4.25% to 4.5%, proposing a 0.25 percentage point cut instead, indicating a rare occurrence of "dual dissent" within the board [3]. - Waller and Bowman had previously expressed their views advocating for rate cuts, reflecting differing interpretations of the current economic conditions, particularly regarding labor market stability [5][6]. - Powell acknowledged the internal disagreements as stemming from noble intentions and polite discussions, emphasizing the thoughtful nature of the rate policy despite external noise [6]. Group 2: Economic Context and Market Reactions - Trump's administration has exerted pressure on the Federal Reserve, with considerations of dismissing Powell, although recent visits to the Fed did not lead to significant market fluctuations [8]. - Following the July 30 meeting, investor confidence in Powell's judgment increased, despite the dissent, as he defended a cautious approach to interest rates, which led to a slight rise in U.S. Treasury yields and a drop in the stock market [8]. - Expectations for the Fed's next meeting in September shifted, with the likelihood of a rate cut dropping from two-thirds to less than half after Powell's remarks, highlighting market uncertainty regarding future monetary policy [9].

Core Viewpoint - The Federal Reserve decided to maintain interest rates unchanged at 4.25%-4.50%, marking the fifth consecutive meeting without a rate change, amidst rare dissent among board members [1][3]. Group 1: Federal Reserve Decision - The decision to keep rates steady was supported by 9 out of 12 voting members, while two members, Waller and Bowman, opposed the decision, advocating for a 25 basis point cut [3]. - This dissent is notable as it marks the first time since 2020 that more than one Federal Reserve official voted against the chair's decision [3]. - The Fed's statement highlighted that while the unemployment rate remains low and the job market is stable, inflation is still slightly elevated, and economic growth has slowed in the first half of the year [3]. Group 2: Future Rate Expectations - Fed Chair Jerome Powell indicated that the central bank is monitoring the potential impact of tariffs on inflation and has not yet made a decision regarding a rate cut in September [4][5]. - Following the Fed's announcement, traders significantly reduced their expectations for a September rate cut, with the probability of maintaining rates at 58.8% and a 41.2% chance of a 25 basis point cut [6]. - The probabilities for future meetings show a cumulative 47.4% chance of a 25 basis point cut by October and a 14.6% chance of a 50 basis point cut [6][7]. Group 3: Market Reactions - Analysts noted that Powell's remarks reflected both hawkish and dovish tendencies, suggesting that the threshold for a policy shift has lowered, allowing for potential rate cuts if upcoming data is unfavorable [8]. - The market reacted positively to the hawkish signals, with the dollar index rising close to 100, although a disappointing non-farm payroll report could reverse these expectations [8].

Group 1 - The Federal Reserve decided to maintain the federal funds rate target range at 4.25% to 4.50%, marking the fifth consecutive meeting this year where rates were held steady, aligning with market expectations [1] - The Fed's latest statement was perceived as slightly dovish, acknowledging a slowdown in U.S. economic growth and removing previous language that suggested reduced economic uncertainty, indicating greater downside risks to employment goals [1] Group 2 - During the press conference, Fed Chair Powell's tone shifted to a more hawkish stance, emphasizing that tariffs only pose a one-time shock to price levels and that the Fed will ensure tariffs do not trigger inflation [2] - Powell noted that the current labor market is in a state of supply-demand balance with low unemployment rates, suggesting that key indicators should focus on unemployment rather than employment growth, which may slow significantly [2] - The hawkish signals from the press conference surprised the market, leading to a sell-off in short-term government bonds, contradicting expectations that Powell would pave the way for a rate cut in September [2]