Core Viewpoint - The Federal Reserve's recent interest rate cut of 25 basis points to a target range of 4.00% to 4.25% marks a significant shift in monetary policy, impacting global capital risk pricing and providing a favorable environment for Chinese assets [1][2]. Group 1: Impact on Chinese Assets - The 25 basis point rate cut aligns with market expectations and is seen as a preventive risk management measure, which lowers external constraints and creates a favorable window for the strengthening of Chinese assets [2]. - The restoration of the China-U.S. interest rate differential enhances the long-term appeal of Chinese bonds [2]. - The weakening of the strong dollar expectation contributes to stabilizing the RMB exchange rate [2]. - International funds are likely to reduce their concerns about A-shares and RMB assets, leading to increased strategic allocations in a lower risk premium environment [2]. Group 2: Macro Policy Space for China - The Fed's rate cut provides more room for China's macroeconomic policy, although it does not imply a straightforward follow-the-leader approach [3]. - China's macro policy focus remains on stabilizing growth and mitigating risks, with a flexible monetary policy that supports the real economy through structural tools and credit guidance [3]. - Effective investment expansion and optimizing expenditure structure are core strategies on the fiscal side [3]. - The external environment created by the Fed's cut is relatively loose, but domestic economic development and high-quality growth objectives will ultimately dictate policy direction [3]. Group 3: Future Fed Rate Cuts - The Fed's future rate cut trajectory is closely watched, with indications that the policy rate remains above neutral levels, suggesting a cautious approach to further easing [3]. - The Fed may retain policy tools to address potential employment downturn risks rather than fully releasing all easing measures prematurely [3]. - Conditions that could trigger another Fed rate cut include a sustained rise in U.S. unemployment above 4.5%, a significant reduction in consumer momentum, and confirmation that inflationary pressures are transitory [4].