Core Viewpoint - Cleveland Federal Reserve Bank President Beth Hammack expresses concerns about inflation, indicating that monetary policy is at a "challenging moment" and showing caution towards further rate cuts [1][2] Inflation Concerns - Hammack believes inflation will remain above the Fed's 2% target for the next one to two years, potentially not returning to target until late 2027 or early 2028 [1][2] - She highlights persistent inflation pressures across overall, core, and particularly service sector inflation [2] Current Monetary Policy Stance - Hammack describes the current federal funds rate target range of 4.00%-4.25% as "moderately restrictive" and emphasizes that a shift to a more accommodative policy would require "more substantial economic weakness," which she does not currently observe [3] - Despite recent economic data supporting her cautious stance, market expectations for a rate cut at the upcoming Fed meeting remain high, with a 90% probability for a 25 basis point cut [3] External Challenges - Hammack acknowledges additional challenges facing the Fed, including discussions around the central bank's independence and the potential impact of a government shutdown on the economy [5] - She warns that a prolonged government shutdown could negatively affect GDP, indicating the need for the Fed to monitor long-term implications [5]

Core Viewpoint - The current neutral interest rate is higher than the pre-pandemic level according to Federal Reserve's Bowman [1] Group 1 - The Federal Reserve indicates a shift in the neutral interest rate, suggesting a change in monetary policy dynamics [1]

Core Viewpoint - The Federal Reserve's Bowman anticipates a neutral interest rate median of 3% [1] Group 1 - The expectation of a neutral interest rate at 3% indicates a potential shift in monetary policy that could impact borrowing costs and economic growth [1]

Core Viewpoint - The Federal Reserve is experiencing deepening internal divisions regarding future interest rate adjustments, with contrasting views among officials on the necessity and timing of rate cuts [2][3][7]. Group 1: Divergent Views on Rate Cuts - Kansas City Fed President Jeffrey Schmid expressed concerns that excessive rate cuts could hinder inflation from returning to the Fed's 2% target, indicating that the current policy stance is only slightly restrictive [2][3]. - Chicago Fed President Austan Goolsbee voiced unease about aggressive rate cuts, fearing they could obstruct the return of inflation to target levels, and highlighted signs of stagflation risks [5][6]. - Fed Vice Chair Michelle Bowman and new board member Stephen Milan advocated for more aggressive rate cuts, with Milan suggesting a rapid adjustment to neutral rates through a series of 50 basis point cuts [7][8]. Group 2: Current Economic Indicators - Schmid noted that while inflation remains high, the labor market is cooling, and he emphasized a data-dependent approach to future rate decisions [4]. - Goolsbee pointed out that the current economic environment shows signs of stagflation, and he remains open to further rate cuts if data supports a stable employment outlook and inflation returning to 2% [5][6]. - Daly, the San Francisco Fed President, expressed support for the recent rate cut and anticipated further reductions, asserting that the economy is not heading towards recession [9].

Core Viewpoint - The new Federal Reserve Governor Stephen Miran advocates for significant and rapid interest rate cuts in the coming months to prevent unnecessary layoffs in the labor market [1][2] Group 1: Interest Rate Policy - Miran believes current interest rates are excessively high and that the neutral interest rate has significantly declined, suggesting that previous estimates may have been systematically overestimated [1] - He estimates the neutral interest rate to be around 2.5%, which is notably lower than the Federal Reserve officials' median forecast of 3% [1] - Miran proposes a series of 50 basis point cuts to quickly return to neutral levels, rather than a gradual approach throughout the year [2] Group 2: Economic Impact - Miran warns that maintaining short-term rates approximately two percentage points above the neutral level could lead to unnecessary layoffs and higher unemployment [1] - He expresses optimism about rental inflation, suggesting it will take time to reflect in official inflation data [3] Group 3: Market Reactions - JPMorgan's Chief U.S. Economist Michael Feroli critiques Miran's arguments, stating that they are largely unconvincing and unlikely to gain support from the Federal Open Market Committee (FOMC) [2] - Feroli maintains that the FOMC is expected to gradually lower rates by 25 basis points until early next year, reaching a range of 3.25%-3.5% [2] - He highlights that Miran's focus on rental inflation neglects other components of inflation, which could misrepresent overall price level changes [3]

Report Investment Ratings - Aluminum: High-level oscillation [1] - Alumina: Weak operation [1] - Cast aluminum alloy: Follow electrolytic aluminum [1] Core Views - The report updates the fundamental data of aluminum, alumina, and cast aluminum alloy, including futures market and spot market data, and analyzes the price trends and related indicators of these products [1] Summary by Related Catalogs Futures Market Electrolytic Aluminum - The closing price of the main contract of Shanghai aluminum was 20,765 yuan, down 20 yuan from T - 5 and up 370 yuan from T - 66; the closing price of the night session was 20,800 yuan [1] - The trading volume of the main contract of Shanghai aluminum was 146,073 lots, down 81,565 lots from T - 5; the open interest was 220,640 lots, down 29,538 lots from T - 5 [1] - The closing price of LME aluminum 3M was 2,664 US dollars, down 41 US dollars from T - 5 and up 145 US dollars from T - 66; the trading volume was 18,169 lots, down 2,784 lots from T - 5 [1] - The proportion of LME canceled warrants was 20.95%, down 0.31% from T - 5; the LME aluminum cash - 3M spread was -2.10 [1] Alumina - The closing price of the main contract of Shanghai alumina was 2,942 yuan, up 11 yuan from T - 5 and down 178 yuan from T - 22; the closing price of the night session was 2,919 yuan [1] - The trading volume of the main contract of Shanghai alumina was 329,000 lots, down 104,801 lots from T - 5; the open interest was 303,116 lots, up 110,389 lots from T - 22 [1] - The spread between the near - month contract and the consecutive first contract was -18 yuan; the cost of buying the near - month contract and selling the consecutive first contract for inter - period arbitrage was 25.28 yuan [1] Aluminum Alloy - The closing price of the main contract of aluminum alloy was 20,385 yuan; the closing price of the night session was 20,385 yuan [1] - The trading volume of the main contract of aluminum alloy was 3,950 lots, down 701 lots from T - 5; the open interest was 11,767 lots, up 1,633 lots from T - 5 [1] - The spread between the near - month contract and the consecutive first contract was -20.00 yuan; the spot premium was 0 yuan [1] Spot Market Electrolytic Aluminum - The electrolytic aluminum enterprise profit and loss was 4,487.40 yuan, up 71.09 yuan from T - 5 and 1,036.85 yuan from T - 66 [1] - The import profit and loss of aluminum spot was -1,321.85 yuan, up 137.43 yuan from T - 5; the import profit and loss of aluminum 3M was -1,176.60 yuan, up 106.38 yuan from T - 5 [1] - The domestic social inventory of aluminum ingots was 614,000 tons, down 22,000 tons from T - 5; the warehouse receipts of aluminum ingots on the Shanghai Futures Exchange were 64,400 tons, down 10,100 tons from T - 5 [1] - The LME aluminum ingot inventory was 515,900 tons, up 2,000 tons from T - 5 [1] Alumina - The average domestic price of alumina was 3,026 yuan, down 40 yuan from T - 5 and 276 yuan from T - 66 [1] - The CIF price of alumina in Lianyungang was 347 US dollars/ton, down 2 US dollars from T - 5; the CIF price in RMB was 2,935 yuan, down 70 yuan from T - 5 [1] - The FOB price of Australian alumina was 323 US dollars/ton, down 2 US dollars from T - 5 [1] - The profit and loss of alumina enterprises in Shanxi was -33 yuan, down 57 yuan from T - 5 [1] Aluminum Bauxite - The price of Australian imported bauxite was 70 US dollars/ton; the price of Indonesian imported bauxite was 70 US dollars/ton; the price of Guinean imported bauxite was 74 US dollars/ton, down 1 US dollar from T - 5 [1] - The price of Yangquan bauxite (tax - included spot mine price, AI:Si = 4.5) was unchanged from T - 5 and up 20 yuan from T - 66 [1] Aluminum Alloy - The theoretical profit of ADC12 was 159 yuan, up 0 yuan from T - 5 and 720 yuan from T - 66 [1] - The price of Baotai ADC12 was 20,400 yuan, up 0 yuan from T - 5 and 900 yuan from T - 66; the price difference between Baotai ADC12 and A00 was -370 yuan [1] - The total inventory of the three places was 49,735 tons, down 922 tons from T - 5 [1] Caustic Soda - The price of Shaanxi ion - exchange membrane liquid caustic soda (32% converted to 100%) was 2,810 yuan, up 0 yuan from T - 5 and 200 yuan from T - 66 [1]

Core Viewpoint - The article discusses the increasing divergence among Federal Reserve officials regarding future interest rate adjustments, highlighting contrasting views on the necessity and timing of potential rate cuts [4][10][12]. Group 1: Federal Reserve Officials' Perspectives - Kansas City Fed President Jeffrey Schmid expressed concerns that excessive rate cuts could hinder inflation from returning to the Fed's 2% target, indicating that current policy is only slightly restrictive [6][8]. - Chicago Fed President Austin Goolsbee voiced unease about aggressive rate cuts, suggesting that the current economic environment shows signs of stagflation, which complicates the Fed's dual mandate [8][9]. - Fed Vice Chair Michelle Bowman stated that inflation is close enough to the target to justify further rate cuts, emphasizing the fragility of the labor market [10][11]. Group 2: Rate Cut Probabilities - As of September 26, the probability of the Fed maintaining rates in October is 14.5%, while the likelihood of a 25 basis point cut is 85.5%. For December, the probabilities are 4.3% for no change, 35.4% for a cumulative 25 basis point cut, and 60.4% for a cumulative 50 basis point cut [4]. Group 3: Aggressive Rate Cut Proposals - New Fed Governor Stephen Milan advocated for a rapid adjustment of monetary policy, proposing a series of 50 basis point cuts to quickly reach neutral interest rates, totaling a reduction of 150 to 200 basis points [10][12]. - San Francisco Fed President Mary Daly supported the recent rate cut decision and anticipated further cuts, asserting that the economy is not heading towards recession [12].

Core Viewpoint - The new Federal Reserve Governor, Milan, advocates for aggressive interest rate cuts to address economic risks, contrasting with Chairman Powell's gradual approach [1] Group 1: Interest Rate Policy - Milan suggests that current interest rates are 1.5 to 2 percentage points above the neutral rate and calls for multiple 50 basis point cuts to bring rates to a suitable range [1] - He emphasizes that maintaining high rates for an extended period increases economic risks, particularly the likelihood of rising unemployment [1] - Milan defines the neutral rate as being around the mid-2% level, significantly lower than the current Federal Funds rate of 4.00%-4.25% [1] Group 2: Economic Implications - Milan links the recent population growth and subsequent decline to significant economic impacts, noting that the previous surge in population was due to government borrowing and increased immigration [1] - He warns that every day rates remain above the neutral level makes monetary policy more restrictive, increasing financing and investment costs for businesses and households [1] Group 3: Immigration and Housing Market - Milan connects immigration trends to housing rental prices, predicting that negative net immigration will lead to increased housing supply and a cooling of rental inflation over the next 6 to 12 months [2] - He argues that the current high levels of the stock market are driven by non-monetary factors such as tax cuts and deregulation, rather than Federal Reserve monetary policy [2] Group 4: Independence and Future Outlook - Milan's focus on immigration and tariffs aligns with the policies of the Trump administration, raising questions about the independence of the Federal Reserve [2] - Despite his previous role in the Trump administration, Milan asserts that his decisions will be based on independent analysis rather than political directives [2] - Appointed to fill a temporary vacancy, Milan's term will end in January 2026, during which he expects to have three voting opportunities [2]

Core Viewpoint - The Federal Reserve's Daly suggests that increasing interest rates all the way to the neutral level poses significant risks [1] Group 1 - The Federal Reserve should avoid a continuous rate hike to the neutral level due to potential risks involved [1]

Core Viewpoint - The Federal Reserve Governor Milan advocates for immediate and significant interest rate cuts to prevent economic damage, arguing that the current policy rate of 4% to 4.25% is overly restrictive compared to his estimated neutral rate [1] Group 1: Interest Rate Policy - Milan believes that the Federal Reserve should accelerate policy adjustments rather than proceed slowly, as a tight monetary policy makes the economy more vulnerable to downturns [1] - The Federal Reserve recently voted to lower rates by 25 basis points, marking the first cut of 2025, but Milan opposed this decision, favoring a 50 basis point cut instead [1] - Milan suggests that multiple 50 basis point cuts could quickly achieve the neutral rate, allowing for more cautious adjustments thereafter [2] Group 2: Economic Concerns - Several policymakers, including Fed Chair Powell, are cautious about rate cuts due to concerns that tariffs from the Trump administration may continue to drive inflation higher [1] - Powell indicated that the risks of rising inflation, combined with signs of weakness in the labor market, will pose challenges for the Fed's decision-making in the coming months [1]