Economic Growth - The second revision of the U.S. GDP for Q2 shows a quarter-over-quarter annualized growth of 3.3%, slightly up from the initial estimate of 3% [1] - This growth is primarily driven by a rebound in business investment and strong trade performance, indicating a stabilization of the economy after fluctuations in Q1 [1] Business Investment - Business investment continued to be a significant support, growing by 5.7% in Q2, significantly higher than the initial estimate of 1.9% [4] - Key factors include an upward adjustment in transportation equipment investment and the strongest growth in intellectual property products in four years [4] - The data suggests that the economy is adapting to the new trade policy environment after a contraction in Q1 due to accelerated imports before tariff adjustments [4] Gross Domestic Income (GDI) - GDI, another core indicator of economic activity, surged by 4.8% in Q2, far exceeding the 0.2% increase in Q1 [4] - GDI focuses on income and costs in the production phase, while GDP measures the value of final goods and services, both indicating increased economic activity [4] Corporate Profits - Corporate profits rose by 1.7% in Q2, reversing the largest decline since 2020 in Q1 [4] - Non-financial corporate after-tax profits accounted for 15.7% of total value added, significantly above the average level from the 1950s to pre-pandemic [4] - The ability of companies to pass on tariff costs to consumers is a critical variable, potentially impacting inflation [4] Trade Performance - Trade performance was a highlight, with net exports contributing nearly 5 percentage points to GDP, marking a historical high [4] - The calculation logic indicates that while non-U.S. produced goods are included in GDP during consumption, they must be deducted from the total during production [4] Consumer Spending - Consumer spending showed a moderate recovery, with a quarter-over-quarter annualized growth of 1.6% in Q2, up from the initial estimate of 1.4% but still below long-term trends [5] - The "final sales" metric, which excludes trade and inventory fluctuations, grew by 1.9%, indicating a need for stronger domestic demand [5] - Retailers exhibit mixed attitudes, with Walmart raising its annual sales forecast while Home Depot emphasizes customer financial health [5] Inflation and Monetary Policy - The core PCE index rose by 2.5% in Q2, consistent with the initial estimate [6] - Federal Reserve Chairman Powell noted that the impact of tariffs on prices has become evident, but there remains room for rate cuts in September due to employment market risks [6] - Overall, the U.S. economy shows resilience driven by trade and investment, but uncertainties regarding tariff policies, persistent inflation, and consumer momentum need to be monitored [6]

Group 1 - The core viewpoint is that the independence of the Federal Reserve is facing significant challenges for the first time in decades, which could pose substantial risks to the market and economy [1] - Olli Rehn emphasized that the credibility gained from central bank independence enhances the effectiveness of monetary policy, allowing central banks to avoid drastic measures in response to temporary economic fluctuations [1] - The recent pressure from President Trump, including attempts to dismiss Federal Reserve officials, highlights the ongoing threats to the Fed's independence [1] Group 2 - Rehn noted that the inflation outlook in the Eurozone remains uncertain, with the European Central Bank (ECB) expected to maintain the deposit rate at 2% for the second consecutive month due to the need to assess the impact of recent trade agreements with the U.S. [2] - Geopolitical influences and trade wars are casting a shadow over the economic outlook, with short-term factors such as falling energy prices and a stronger euro expected to bring inflation below the 2% target [2]

Group 1 - Gold prices have been fluctuating upwards, recently rebounding by $30 to break through the $3400 mark, but facing resistance and adjustments [1][6][12] - The market is currently in a rebound trend, with key support levels at $3384 and $3350, while resistance levels are at $3408 and $3438 [12][13] - The gold market has experienced four consecutive months of gains, but is now entering a period of consolidation, oscillating between $3300 and $3400 [12] Group 2 - Recent factors influencing gold prices include rising inflation expectations in the U.S., driven by tariff impacts and increased consumer confidence, alongside strong Japanese bond yields leading to a sell-off [13] - The upcoming U.S. unemployment claims data and second-quarter GDP figures are expected to significantly impact the labor market and economic outlook, which could influence Federal Reserve decisions [14] - The U.S. sovereign credit is facing unprecedented challenges, raising questions about the future of the dollar as a global reserve currency [15]

Core Viewpoint - The ongoing conflict between President Trump and the Federal Reserve is escalating, with significant implications for the Fed's independence and monetary policy direction [2][10]. Group 1: Federal Reserve's Independence - Trump's actions, including the dismissal of Fed Governor Lisa Cook, are seen as unprecedented attacks on the Fed's independence, potentially leading to higher inflation and decreased credibility [9][10]. - Analysts warn that if Trump successfully alters the composition of the Federal Reserve Board, it could lead to a shift towards more accommodative monetary policy, undermining the Fed's traditional data-driven approach [10][11]. Group 2: Impact on Monetary Policy - The Federal Reserve's current stance remains moderately restrictive, with officials indicating that rate cuts may be appropriate in the future, depending on economic conditions [3][4]. - The potential for Trump to influence the selection of regional Fed presidents could significantly impact monetary policy decisions, particularly if he gains a majority on the Fed Board [7][11]. Group 3: Market Reactions - The bond market has begun to show signs of distortion, with a steepening yield curve indicating rising inflation expectations and risk premiums due to perceived threats to the Fed's independence [4][11]. - Despite current market calmness, there is a growing concern that the political influence over the Fed could lead to increased volatility and higher inflation in the long term [10].

Core Viewpoint - The bond market is currently facing contradictions due to "anti-involution" policies and future inflation expectations, leading to adjustments in market sentiment and investment strategies [1][2]. Group 1: Bond Market Analysis - The 10-year government bond ETF (511260) rose by 0.07% on August 27, indicating stable performance, with a support level around 1.8% for the 10-year bond yield due to long-term institutional investments [1]. - The bond market is expected to experience fluctuations, with a recommendation for a wave trading strategy, as the yield remains above 1.75%, suggesting value in long-term bonds [1]. - The central bank's monetary policy remains accommodative, and rising inflation could increase the likelihood of interest rate cuts by year-end, which may lead to a potential restart of government bond trading [1]. Group 2: Market Sentiment and Investment Opportunities - The strong performance of the stock market is exerting pressure on the bond market, with prevailing pessimistic expectations among investors [2]. - Historical analysis shows that the relationship between stocks and bonds is unstable, as major bond market investors (like banks and insurance companies) are unlikely to shift significant funds to the stock market due to risk considerations [2]. - The high valuation of bonds, following a three-year bull market, has led to yields being at historical lows, making them relatively expensive compared to the dividend yields of the CSI 300 index (2.5-3%) [2]. - The release of pessimistic sentiment may create investment opportunities for bottom-fishing in the bond market after significant declines [2].

Group 1 - The U.S. Treasury bond market is experiencing a mixed performance, with the 2-year bond yield dropping over 5 basis points while the 30-year bond yield approaches 4.95%, nearing the 5% mark [1] - There is a growing concern among investors regarding President Trump's recent strong stance against the Federal Reserve, which may undermine the central bank's independence and increase inflation expectations, impacting the dollar and the bond market [1] - The current political risk score for the U.S. is 41.79, close to the average of 28 emerging market countries at 44, indicating that the U.S. is becoming more similar to emerging markets in terms of risk [1] Group 2 - The U.S. Treasury issued $70 billion in 5-year bonds with a winning yield of 3.724%, the lowest since September last year, and lower than July's 3.983% [2] - The bid-to-cover ratio for the auction was 2.36, slightly better than the previous month's 2.31 but still below the recent average of 2.37 [2] - The indirect bid ratio, which reflects foreign demand, was 60.5%, up from 58.3% last month but significantly below the recent average of 69.3% [2]

Core Viewpoint - The ongoing conflict between President Trump and the Federal Reserve is escalating, with potential implications for the Fed's independence and monetary policy direction [1][11]. Group 1: Federal Reserve Actions - Federal Reserve Governor Lisa Cook is expected to file a lawsuit regarding her dismissal by President Trump [3][4]. - New York Fed President John Williams indicated that lowering interest rates may be appropriate at the right time, while maintaining a moderately restrictive policy stance [1]. - The Trump administration is exploring ways to exert more influence over the 12 regional Federal Reserve banks, particularly regarding the selection process for regional bank presidents [1][5]. Group 2: Implications for Fed Independence - Analysts warn that Trump's actions could signify the end of the Fed's independence, a status it has held since 1951, with financial markets yet to fully absorb this significant risk [1][11]. - Former Fed Vice Chair Lael Brainard views Trump's attack on Cook as part of a broader effort to pressure the Fed, potentially leading to the dismissal of multiple regional Fed presidents [6][8]. - The potential for Trump to control the Fed's monetary policy could result in higher inflation and increased volatility in the financial markets [11]. Group 3: Market Reactions - Current market conditions reflect a distortion in the Treasury market, with long-term yields rising and short-term real yields falling, indicating that the Fed's independence is perceived to be under threat [12]. - Deutsche Bank's report suggests that if Trump successfully removes Cook and appoints a candidate favoring significant rate cuts, the power dynamics within the Fed could shift dramatically, leading to a majority of "dovish" votes [12].

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - The bond market is under phased pressure, and potential negative feedback effects should be vigilant. The recent bond market has been under continuous pressure, mainly disturbed by three factors: the strengthening of M1 year - on - year data, the significant recovery of market risk appetite, and the "anti - involution" policy expectation. The stock - bond cost - performance index shows that the bond allocation value is accumulating but has not reached the threshold for asset re - allocation. In the short term, the strong performance of the equity market is the biggest risk for the bond market, and investors are advised to maintain a defensive stance and a short - duration strategy [5]. 3. Summary According to the Table of Contents 3.1 Bond Market Weekly Review - From August 18th to 22nd, the yields of treasury bonds fluctuated upwards, and the stock - bond seesaw effect dominated the bond market trend. The yields of 1 - year and 10 - year treasury bonds increased by 0.42bp and 3.53bp respectively, closing at 1.3707% and 1.7818%. The bond market was affected by factors such as tax payment, LPR quotes, and equity market trends during the week [2][10]. 3.2 Bond Market Data Tracking 3.2.1 Funding Situation - From August 18th to 22nd, the central bank's open - market operations had a net injection of 12,652.00 billion yuan. The central bank conducted 20,770.00 billion yuan in reverse repurchases and had 7,118.00 billion yuan in maturities. The funding rates first increased and then decreased. R001, DR001, R007, and DR007 all increased compared to the previous week, and the funding situation remained in a tight balance. The central bank is expected to continue to maintain liquidity injection next week, and the funding rate center may remain flat [4][23]. 3.2.2 Supply Side - From August 18th to 22nd, the total issuance volume of interest - rate bonds increased, and the net financing amount increased. The total issuance scale of interest - rate bonds was 13,099.50 billion yuan, an increase of 1,335.28 billion yuan from the previous week. The government bond issuance scale decreased, and the net financing amount decreased. The issuance scale of inter - bank certificates of deposit decreased, and the net financing amount decreased [39][42]. 3.3 Next Week's Outlook and Strategy 3.3.1 Next Week's Outlook - The supply pressure of treasury bonds will ease next week. There are no treasury bond issuance plans, and the planned issuance of local government bonds is 3,515.97 billion yuan. Facing the cross - month disturbance and large - scale reverse repurchase maturity pressure, the central bank is expected to continue to maintain a stance of protecting liquidity, and the funding rate center may remain flat [3][60]. 3.3.2 Bond Market Strategy - The bond market is under phased pressure, and potential negative feedback effects should be vigilant. The recent bond market has been under pressure due to factors such as the strengthening of M1 data, the recovery of market risk appetite, and policy expectations. The stock - bond cost - performance index shows that the bond allocation value is accumulating. In the short term, the strong performance of the equity market is the biggest risk for the bond market. Investors are advised to maintain a defensive stance and a short - duration strategy [5]. 3.4 Global Major Assets - U.S. Treasury yields generally declined. As of August 22, 2025, the yields of 1Y, 2Y, 3Y, 5Y, 10Y, and 30Y U.S. Treasuries decreased compared to August 15. The U.S. dollar index declined, and the central parity rate of the U.S. dollar against the RMB decreased slightly. Gold, silver, and crude oil prices generally rose [69][70].

Core Viewpoint - Deutsche Bank suggests that if Trump successfully gains control of the Federal Reserve Board with four dovish votes, it could lead to aggressive monetary easing policies and allow for unilateral actions to lower the Interest Rate on Reserve Balances (IORB), bypassing the FOMC's decisions [1][3][12] Group 1: Control of the Federal Reserve Board - Trump's administration is seeking to gain control of the Federal Reserve Board by dismissing Governor Cook, which would enable the implementation of aggressive monetary policies [3][6] - Following the resignation of Governor Kuger, Trump has garnered increasing support for dovish monetary policies within the committee [4] - If Trump appoints a candidate favoring significant rate cuts to replace Cook, the power dynamics within the Board will change dramatically, potentially leading to a majority of dovish votes [6][7] Group 2: Impact on Monetary Policy - The emergence of four stable dovish votes within the Board would significantly increase internal pressure for faster and larger rate cuts, even amidst high inflation data [7][12] - The Board's majority could utilize its power to unilaterally lower the IORB, which has historically been aligned with FOMC targets, thus challenging the traditional decision-making framework [9][10] - This unilateral action could lead to unprecedented dynamics in the money market, creating potential chaos and directly impacting the FOMC's traditional decision-making process [11] Group 3: Restructuring the FOMC - The majority within the Federal Reserve Board also holds the long-term power to reshape the composition of the FOMC voting members, as all 12 regional Federal Reserve Presidents require Board approval for reappointment every five years [12][13] - A Board majority seeking aggressive easing could veto the reappointment of hawkish regional Fed Presidents, gradually eliminating opposing voices and paving the way for long-term easing policies [13]

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - **Gold**: Due to the resurgence of European - American trade disputes, the gold price fluctuated and closed higher. The Shanghai gold premium continued to expand to 0.1 yuan/gram. With the high dovish expectations of the shadow Fed, the gold price is supported. Considering the global situation after Trump's inauguration and the shift from inflation to recession expectations, the gold price is still likely to rise and hard to fall [4]. - **Silver**: After Trump announced to "fire" the current Fed governor, but the Fed stated that Trump's power to remove the governor was limited, the silver price fluctuated and declined. The Shanghai silver premium expanded to about 440 yuan/kg. The silver price still mainly follows the gold price and is affected by tariff concerns [6]. 3. Summary by Directory 3.1 Previous Day's Review - **Gold**: The US three major stock indexes rose slightly, European three major stock indexes fell across the board. Most US bond yields declined, with the 10 - year US bond yield dropping 0.78 basis points to 4.261%. The US dollar index fell 0.20% to 98.24, and the offshore RMB against the US dollar appreciated slightly to 7.1534. COMEX gold futures rose 0.75% to $3443.20 per ounce [4]. - **Silver**: Similar to gold in terms of stock indexes, bond yields, and the US dollar index. COMEX silver futures fell 0.02% to $38.70 per ounce [6]. 3.2 Daily Hints - **Gold**: The basis is - 4.4, with the spot at a discount to the futures; the inventory of gold futures decreased by 12 kilograms to 37503 kilograms; the 20 - day moving average is upward, and the K - line is above the 20 - day moving average; the main net position is long, and the main long position increased [5]. - **Silver**: The basis is - 43, neutral; the inventory of Shanghai silver futures increased by 13692 kilograms to 1127333 kilograms; the 20 - day moving average is upward, and the K - line is above the 20 - day moving average; the main net position is long, and the main long position decreased [6]. 3.3 Today's Attention - Time TBD, from August 27th - 29th, the 2025 AGIC Shenzhen (International) General Artificial Intelligence Conference and General Artificial Intelligence Industry Expo will be held at the Shenzhen International Convention and Exhibition Center. - At 09:30, China's industrial enterprise profits above designated size in July and Australia's CPI in July will be released. - At 12:01, Richmond Fed President Barkin (a 2027 FOMC voter) will talk about the economy again [15]. 3.4 Fundamental Data - **Gold**: The logic is that after Trump's inauguration, the world entered a period of extreme turmoil and change, with inflation expectations shifting to recession expectations, making it difficult for the gold price to decline. The verification between the new US government's policy expectations and reality will continue, and the gold price sentiment is high, still prone to rise and hard to fall [10]. - **Silver**: It follows the gold price. The tariff concerns have a stronger impact on the silver price, and the silver price is prone to an enlarged increase [13]. 3.5 Position Data - **Gold**: On August 26, 2025, the long position volume of the top 20 in Shanghai gold was 625,171, an increase of 0.47% from the previous day; the short position volume was 472,276, an increase of 0.25%; the net position was 152,895, an increase of 1.14% [30]. - **Silver**: On August 26, 2025, the long position volume of the top 20 in Shanghai silver was 1,082,920, a decrease of 3.30% from the previous day; the short position volume was 993,680, a decrease of 2.78%; the net position was 89,240, a decrease of 8.77% [33].