Report Industry Investment Rating - No information provided regarding the industry investment rating for this specific topic in the given content. Core Viewpoints - At the July 2025 meeting, the Fed decided to keep the policy rate unchanged at 4.25 - 4.5%, with dissenting votes from Bowman and Waller who supported a 25BP rate cut. Powell's hawkish stance dampened market expectations of a September rate cut [2]. - The market adjusted its September rate - cut expectations after the Fed's press conference, with short - term interest rates rising significantly, the US dollar continuing to strengthen, and the US stock market under pressure. As of 4:30 Beijing time, the 2Y and 10Y US Treasury yields rose 6.8BP and 2.8BP respectively compared to before the meeting, the US dollar index rose 0.6% to around 100 points, and the S&P 500 fell 0.4% at the close [2]. - There is no high certainty of a September rate cut by the Fed. If the unemployment rate remains stable or rises slightly in the next two months, the Fed may keep the interest rate unchanged to wait for the longer - term impact of tariffs. The delay in tariff transfer to consumers may imply consumer weakness [2]. - Regarding US Treasury yields, if inflation does not rise significantly in the next two months, the bond market opportunities will increase in the fourth quarter; if inflation rises significantly, US Treasury yields may rise further. Short - term, it is recommended to maintain a relatively short duration [2]. - For the US dollar index, short - term short - covering may bring some upward space. The view that the US dollar index will operate in the 95 - 105 range is maintained [2]. Summary by Related Content Fed Meeting Decision - In the July 2025 meeting, the Fed kept the policy rate at 4.25 - 4.5%. Bowman and Waller voted against, supporting a 25BP rate cut this month [2]. Powell's Stance - Powell's stance was hawkish, not pre - setting expectations for the September policy decision. He adheres to data - dependence. In terms of inflation, he aims to prevent one - time price increases from turning into persistent inflation and hopes to maintain a moderately restrictive monetary policy. He believes the impact of tariffs on inflation is in the early stage and the transfer to consumers may be slower than expected [2]. - Regarding employment, he thinks the job market is relatively stable despite some downside risks. In terms of economic growth, he admits the overall economic growth has slowed, and the large fluctuations in net exports may affect consumer spending, making it difficult to interpret some signals. He also believes consumers' credit conditions are good despite the slowdown in consumption growth [2]. Market Reaction - After the Fed's press conference, the market lowered its September rate - cut expectations. Short - term interest rates rose significantly, the US dollar continued to strengthen, and the US stock market was under pressure. As of 4:30 Beijing time, the 2Y and 10Y US Treasury yields rose 6.8BP and 2.8BP respectively compared to before the meeting, the US dollar index rose 0.6% to around 100 points, and the S&P 500 fell 0.4% at the close [2]. Outlook for September Fed Meeting - There is no high certainty of a September rate cut. If the unemployment rate remains stable or rises slightly in the next two months, the Fed may keep the interest rate unchanged to wait for the longer - term impact of tariffs. The delay in tariff transfer to consumers may imply consumer weakness [2]. US Treasury Yields Outlook - If inflation does not rise significantly in the next two months, the bond market opportunities will increase in the fourth quarter; if inflation rises significantly, US Treasury yields may rise further. Short - term, it is recommended to maintain a relatively short duration, and the downward revision of rate - cut expectations provides some allocation opportunities [2]. US Dollar Index Outlook - After the US - EU trade agreement, the US dollar index has risen. Short - term short - covering may bring some upward space. The view that the US dollar index will operate in the 95 - 105 range is maintained [2].

Group 1: Federal Reserve Stance - Federal Reserve continues to pause interest rate cuts, indicating a shift from "economic activity continues to expand steadily" to "economic activity growth has slowed in the first half of the year" [1] - Powell's hawkish stance suggests that asserting a rate cut in September is premature, with inflation outlook showing mixed signals [1] - Market's expectation for rate cuts has retracted by 10 basis points, with the CME FedWatch indicating a drop from 45 basis points to 35 basis points for the year [1] Group 2: Economic Indicators - Labor market indicators such as turnover rates, job vacancies, and unemployment rates are close to levels from a year ago, indicating no significant weakness [1] - Employment creation and labor supply are slowing, presenting downside risks to the labor market [1] - The market is now leaning towards a single rate cut for the year, with expectations for a potential shift towards rate cut anticipation in August if tariff impacts on inflation remain manageable [2] Group 3: Market Reactions - Following the announcement, the US dollar index rose approximately 0.5%, nearing 100, while the 10-year Treasury yield increased from 4.34% to around 4.38% [1] - The market's confidence in a rate cut in October has decreased to about 80% following the meeting [1] - The overall economic data rebound and retraction of rate cut expectations are expected to support the dollar, although future agreements remain uncertain [2]

Group 1: FOMC Meeting Insights - The July FOMC meeting maintained interest rates at 4.25-4.5% with a 9-2 vote, signaling a hawkish stance due to inflation concerns[1] - Powell indicated that the distance to achieve inflation targets is greater than that for employment, suggesting a need for restrictive policy rates[1] - The market now expects the likelihood of a rate cut in September to be delayed until Q4 2025, with 2-year and 10-year U.S. Treasury yields projected to rise to 4.05% and 4.5% respectively in August and September[1] Group 2: Economic Indicators and Projections - Economic growth is showing signs of moderation, with consumer spending beginning to slow down, and GDP growth expected to be revised downwards[1] - The labor market remains balanced, but there are signs of downward risks with a slight decline in private sector job opportunities[1] - Inflation remains a concern, with tariffs beginning to impact goods inflation, while service sector inflation shows improvement[1] Group 3: Market Reactions and Future Expectations - Following the FOMC meeting, the probability of a September rate cut has decreased to 47%, with an average expectation of 1.48 rate cuts for the year[1] - The market anticipates a new round of monetary easing after the appointment of a new Fed chair, with expectations for three rate cuts in 2026 potentially increasing to four or more[1] - The overall strategy suggests that the U.S. Treasury yields may initially rise before declining later in the year as the market adjusts to new monetary policies[1]

Overview - The core CPI data for June in the US was slightly weaker than expected, but the inflation effects of tariffs are becoming more evident [3][7][38] - The June CPI year-on-year was 2.7%, slightly above the market expectation of 2.6%, while the core CPI was 2.9%, matching expectations [3][38] - The market reacted to the data with a temporary decline in the 10Y Treasury yield and the US dollar index, which later recovered, indicating a focus on future inflation expectations [11][38] Structure - The main drivers of the CPI rebound include rising oil prices, core goods (excluding new and used cars), and non-rent services [4][39] - The energy CPI for June increased by 0.9% month-on-month, recovering from a previous decline of -1.0%, reflecting global oil price increases [4][39] - Core goods inflation showed signs of warming, with a month-on-month increase of 0.2%, driven by clothing, toys, and audio-visual equipment, indicating the impact of tariffs [20][39] - Rent inflation slightly slowed to 0.2% month-on-month, while core non-rent service inflation rebounded, particularly in medical, transportation, and entertainment services [4][39] Outlook - The second half of the year may see continued upward pressure on inflation, with the third quarter being a critical verification period for tariff inflation effects [5][28][40] - The Federal Reserve is expected to initiate rate cuts in September, with two cuts anticipated within the year, despite potential inflation increases [5][34][40] - The combination of moderate inflation increases and weakening employment may influence the Fed's decision-making [34][40]

Group 1: Macroeconomy - The core of the "Great Beautiful Act" signed by Trump includes significant tax cuts for corporations and individuals, reductions in clean energy subsidies, and cuts to Medicaid and SNAP, which will increase the fiscal deficit in the future [3] - The act is projected to boost the actual GDP by less than 0.5 percentage points and has an inflationary impact of no more than 0.15 percentage points by 2026 [3] - Over the next decade, the combination of tariffs and tax cuts is expected to increase the net deficit by approximately $1.3 trillion, maintaining a deficit rate around 6% [3] - Current economic conditions, including low unemployment and moderate inflation, suggest that the U.S. government debt does not face immediate risks [3] Group 2: Strategy - The passage of the "Great Beautiful Act" is anticipated to increase bond supply, which may lead to higher U.S. Treasury yields, potentially affecting market sentiment and stock prices in the short term [7] - Despite short-term liquidity disturbances, the overall credit cycle recovery and the Federal Reserve's interest rate reduction trajectory remain unchanged, providing better buying opportunities for both U.S. stocks and bonds [7] Group 3: Quantitative & ESG - A real-time forecasting model driven by large language models (LLMs) is proposed to address the lag in macroeconomic indicators, allowing for timely adjustments in investment strategies based on economic changes [11] Group 4: Strategy - A forecast for the mid-year report indicates that A-share earnings growth may slow compared to the first quarter, but the second half of the year could see improved performance, particularly in the non-bank financial sector due to high market activity [14] - In the non-financial sector, midstream and upstream companies may face performance pressures due to price impacts, while sectors like gold, consumer upgrades, and tech hardware are expected to show structural strengths [14] Group 5: Food and Beverage Industry - The food and beverage sector is expected to stabilize in demand in the second half of 2025, driven by government policies aimed at boosting consumption and encouraging births [17] - The mass food segment has shown signs of improvement since March, with new consumption trends in snacks and health drinks likely to drive valuation increases in the sector [17] - The liquor sector is currently in a valuation correction phase, but the basic valuation has reflected pessimistic expectations, indicating emerging investment value [17]

Core Viewpoint - The recent tax and spending bill passed by Congress is expected to exacerbate long-term debt issues in the U.S., despite temporarily alleviating short-term default risks [2][3]. Group 1: Legislative Impact - The bill extends Trump's 2017 tax cuts and authorizes increased spending on border security and military, while significantly cutting Medicare and Medicaid [2]. - The borrowing limit for the U.S. government has been raised by $5 trillion, which is projected to increase national debt by $3.4 trillion over the next decade [2][3]. - The Congressional Budget Office estimates that the bill will reduce tax revenue by $4.5 trillion and cut spending by $1.2 trillion over the next ten years, resulting in 10.9 million people losing federal health insurance [3]. Group 2: Market Reactions - Foreign investors are reportedly selling U.S. Treasuries, raising concerns about declining demand and increasing borrowing costs [3]. - The 10-year Treasury yield has rebounded due to investor worries about fiscal health, indicating a potential long-term rise in interest rates [4]. - The market's reaction to the bill has been relatively muted, as the expansion of the deficit has already been priced in since Trump's return to office [5]. Group 3: Economic Outlook - The bill is expected to contribute 0.5% to economic growth next year, but concerns remain that the debt burden may offset the intended economic stimulus [3]. - The focus of the market is shifting towards economic data and corporate earnings, with the debt issue becoming a secondary concern [5].

Employment Data Insights - Non-farm employment increased by 147,000 in June, surpassing the forecast of 110,000 and the previous value was revised up to 144,000[1] - The unemployment rate fell to 4.1%, better than the expected 4.3% and the previous value of 4.2%[1] - Initial jobless claims have decreased from 250,000 on June 7 to 233,000 on June 28, a drop of 17,000[1] Government vs. Private Sector Employment - Government employment rose significantly, with state and local jobs increasing by 47,000 and 33,000 respectively, while federal jobs decreased by 7,000[2] - Private sector job growth was only 74,000, the lowest in eight months, indicating weakness in private employment[2] - The manufacturing and non-manufacturing employment indices fell to 45.0 and 47.2 respectively, indicating a contraction in private sector employment[2] Labor Market Dynamics - The unemployment rate's decline was primarily due to a drop in the labor force participation rate by 0.09%[3] - Employment among foreign-born individuals decreased by 348,000, suggesting ongoing challenges in labor market participation[3] - Over the last three months, employment for foreign-born individuals has declined by a total of 994,000[3] Wage Growth and Inflation - Average hourly earnings in the private sector rose by only 0.22% in June, down from 0.39% in May[4] - Year-on-year growth in total weekly earnings was 4.5%, lower than the three-month average of 5.0%[4] - The slowdown in wage growth may indicate manageable inflation pressures but could lead to reduced consumer spending[4] Federal Reserve Policy Outlook - Following the employment data release, the market's expectation for rate cuts decreased from 64 basis points to 51 basis points for the year[5] - The probability of a rate cut in September dropped from 94% to around 70%[5] - Current labor market data does not support immediate rate cuts, as the overall employment situation remains stable despite some weaknesses[5]

报告摘要 美元还会继续弱吗？——基于两个背离下的美元叙事修正 近期市场各种关于美元的宏大叙事（比如"去美元化"）大行其道，但宏大叙事难以提供对短期市场走势的有效指引。本文不谈长期宏观叙事，而是希望从我们观察 到的美元指数与其历史规律"锚"的两大背离出发，结合具体数据，重新审视当下流行的美元叙事。 （一）思辨之一：如何理解美元指数长期趋势与美国经济占比反向 1 、现象：美国经济占比下，但美元指数上 文 ： 华创证券研究所副所长 、首席宏观分析师 张瑜（执业证号：S0360518090001） 联系人：夏雪 （微信 SuperSummerSnow） 核心观点 基于美元指数两个背离 ( 长期与经济占比"脱钩"，短期与十债利率反向 ) 的思辨，我们认为，需要重新审视并修正"美元将开启持续单边下跌向 70-80 年代看齐"的 叙事。实际上，中期视角而言，考虑到美国相对欧日经济增速差或仍然占优、当下全球养老资管机构因美元波动率上行补美元空仓的交易 或 已比较极致，美元下 跌最快的时候或已过去，未来半年到一年或难言美元持续下行，反而可能需要警惕因仓位演绎较为充分带来的美元反弹风险 。 后金融危机时代，美国经济占比与美元指数 ...

Summary of Key Points from Conference Call Records Industry Overview - The discussion revolves around the U.S. Treasury market and its impact on global asset classes, particularly in the context of changing perceptions regarding the U.S. dollar and its role in the global economy [1][2]. Core Insights and Arguments - **Shift from U.S. Exception to De-dollarization**: There has been a significant shift in market expectations from the U.S. exception narrative to a de-dollarization outlook, which has altered the correlation between stocks, bonds, and other asset classes. This has diminished the traditional safe-haven function of U.S. Treasuries [1][2]. - **Decline in Correlation**: The correlation between U.S. Treasury yields and the U.S. dollar has decreased, leading to a rebound in both U.S. Treasuries and equities, while the U.S. dollar index has declined [2]. - **10-Year Treasury Term Premium**: The 10-year term premium for U.S. Treasuries has reached its highest point in nearly a decade, approximately 0.8%. The Federal Reserve's decisions regarding interest rate cuts will significantly influence Treasury yields and market demand [3]. - **Dollar Index Depreciation**: The U.S. dollar index has depreciated by about 7% this year, primarily due to the shift in market expectations and changes in global capital flows [4][5]. Important but Overlooked Content - **Impact of Global Capital Flows**: There has been a notable outflow of capital from the U.S. Treasury market, with funds returning to the Eurozone bond market, which has kept the 10-year Eurozone bond yields relatively stable (between 3.1% and 3.3%) despite volatility in other sovereign rates [6]. - **Foreign Investment in Sovereign Securities**: The rising interest of foreign investors in Eurozone, German, and Japanese sovereign securities indicates a shift in global capital allocation, which could have varying impacts on the yields of these securities [6].

Summary of Conference Call Notes Industry Overview - The notes primarily discuss the **U.S. economy** and its inflation dynamics, particularly focusing on the **Consumer Price Index (CPI)** and the impact of tariffs and trade relations with China. Key Points and Arguments 1. **CPI Trends**: In May, the core goods CPI experienced a month-on-month decline of -0.04%, indicating reduced upward pressure on prices, potentially due to prior inventory replenishment and recent easing of tariffs [1][4] 2. **Price Performance**: Prices for clothing and communication goods were notably weak, while wholesale prices continued to rise sharply, suggesting that wholesalers absorbed some tariff costs [4][5] 3. **Inflation in China-Dependent Products**: Prices for entertainment products, sports goods, and toys, which are heavily reliant on China, continued to rise, with toys showing a month-on-month inflation rate of 1.35% [6] 4. **Core Services and Rent**: Rent growth has slowed, but forward-looking indicators suggest limited downward space for future rent increases, indicating resilience in core service inflation [7] 5. **Trade War Implications**: The escalation of the trade war could lead to increased goods prices, potentially harming consumer purchasing power in services and discretionary spending [7] 6. **Market Reactions**: Current CPI data is stable, with no further escalation in the U.S.-China trade war, leading to a slight increase in interest rate cut expectations and a decline in U.S. Treasury yields [8] 7. **Future Inflation Risks**: Energy prices have been a significant drag on inflation, with global manufacturing PMI showing weakness and OPEC+ discussions on production cuts affecting oil prices [3] 8. **Consumer Spending Concerns**: There are risks of weakened demand in consumer services related to travel and leisure, as prices in these sectors have been soft over the past two months [7] Additional Important Insights - **Tariff Impact on Prices**: The transmission of tariff costs to consumers is expected to take about 2 to 4 months, indicating a lag in the impact of tariffs on retail prices [5] - **Economic Resilience**: Despite the potential for rate cuts, the U.S. economy shows resilience, and the uncertainty surrounding tariffs and tax cuts continues to pose risks for interest rate volatility [2][8] - **Long-term Outlook**: The long-term outlook for U.S. Treasury yields will become clearer once the effects of tariffs and tax cuts are fully absorbed by the economy [2][8]