Group 1: Monetary Policy Decisions - The Federal Open Market Committee (FOMC) lowered the federal funds rate target range by 25 basis points to 4.00%-4.25%, aligning with market expectations[1] - The median rate forecast for the end of the year is 3.5%-3.75%, indicating an additional 50 basis points of potential cuts within the year[2] - Powell characterized the rate cut as a "risk management cut," reflecting a balanced policy stance between hawkish and dovish views[1] Group 2: Economic Outlook - The Fed raised its real GDP growth forecast for next year to 1.8% while slightly lowering the unemployment rate forecast and raising core inflation expectations[2] - There is significant divergence among committee members regarding future rate cuts, with 9 members advocating for 2 more cuts, while 6 believe no further cuts are necessary[2] - Despite a weakening job market, consumer and retail sales indicators remain robust, suggesting a favorable environment for risk assets[3] Group 3: Investment Recommendations - The likelihood of two additional 25 basis point cuts in upcoming meetings is high, making the current environment favorable for equities[3] - Investors are advised to maintain equity asset allocations until there is a clear deterioration in economic indicators[3] Group 4: Risk Factors - Unexpectedly strong recovery in the job market and persistent inflation above expectations could delay the Fed's rate cut schedule[4]

Group 1 - The Federal Reserve held a meeting on September 17, where it lowered the interest rate by 25 basis points to a target range of 4.00%-4.25%, while maintaining the pace of balance sheet reduction [1] - The meeting continued the tone set at the August Jackson Hole global central bank conference, indicating that the risks of job market decline outweigh the risks of rising inflation [1] - The economic outlook was slightly downgraded, with a revision of the unemployment rate for the next two years, leading Powell to label the rate cut as a "risk management cut" based on weak non-farm payroll data [1] Group 2 - The dot plot indicated significant internal divisions within the Federal Reserve, increasing future uncertainty [1] - The dot plot and Summary of Economic Projections (SEP) suggested a total of 75 basis points of cuts this year and 25 basis points each in the following two years, which is notably lower than market expectations prior to the meeting [1] - Current high-frequency data and Powell's statements suggest that the U.S. economy is experiencing a temporary slowdown rather than a recession, indicating that the current rate cut is more of a precautionary measure [1] Group 3 - The report suggests that a 75 basis point cut this year is sufficient to hedge against job market risks, while inflation may still pose an upward risk in the first quarter of next year [1] - After the anticipated cuts of 50-75 basis points, there may be a reversal in rate cut expectations, with a focus on changes in U.S. employment data in September and October [1] - The guidance for rate cuts in the following two years remains conservative, with the SEP showing a consistent 25 basis point cut compared to June [1]

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core View of the Report - In the short - term, inflation pressure in the US still exists, but the rebound is relatively limited, supporting the Fed's August rate cut. The increase in the weekly initial jobless claims in the US highlights the downward risk in the job market and boosts the expectation of three rate cuts by the Fed this year, which supports precious metal prices. However, the strong performance of domestic and overseas bond markets restricts the attractiveness of gold, while silver benefits from risk improvement and shows a strong performance similar to industrial products. Before the rate cut is implemented, precious metal prices are expected to remain at a high level, and long positions can be held, but the risk of increased volatility should be watched out for [5]. - In the long - term, due to the Fed's rate - cut expectation, continuous global geopolitical uncertainty, intensified great - power competition, and the wave of de - dollarization, along with the continuous gold purchases by global central banks, the long - term center of gold prices is likely to continue to rise [5]. 3. Summary by Relevant Catalogs Market Quotes - On September 11, the main contract of Shanghai gold futures closed down 0.31% to 830.78 yuan/gram, and the main contract of Shanghai silver futures closed up 0.28% to 9,798 yuan/kilogram [5]. Price and Spread Data - **Price Data**: On September 11, compared with September 10, London gold spot rose 0.2%, COMEX silver fell 0.2%, AG (T + D) fell 0.3%, London silver spot rose 0.1%, AU2510 fell 0.3%, COMEX gold fell 0.3%, AG2510 remained unchanged, and AU (T + D) remained unchanged [5]. - **Spread Data**: For spreads on September 11 compared with September 10, the spread of gold TD - SHFE active price decreased by 17.1%, the spread of silver TD - SHFE active price decreased by 16.3%, the spread of gold domestic - foreign (TD - London) increased by 1.2%, the spread of silver domestic - foreign (TD - London) decreased by 22.0%, the SHFE gold - silver ratio decreased by 0.4%, the AU2512 - 2510 spread increased by 12.0%, the AG2512 - 2510 spread increased by 15.0% [5]. Position and Inventory Data - **Position Data**: For COMEX gold non - commercial long positions on September 10 compared with September 9, the number increased by 14.52%, and for COMEX silver non - commercial long positions, it increased by 7.83%. The number of gold ETF - SPDR positions increased by 16.43%, and the number of silver ETF - SLV positions decreased by 14.79% [5]. - **Inventory Data**: On September 10 compared with September 9, SHFE gold inventory increased by 0.96%, COMEX silver inventory remained unchanged, SHFE silver inventory increased by 0.47%, and COMEX gold inventory increased by 9.14% [5]. Interest Rate, Exchange Rate and Stock Market Data - On September 11 compared with September 10, the 2 - year US Treasury yield remained unchanged, the 10 - year US Treasury yield decreased by 0.98%, the US dollar/Chinese yuan central parity rate increased by 2.06%, NYWEX crude oil decreased by 0.04%, the S&P 500 increased by 0.08%, the US dollar index increased by 0.30%, and VIX increased by 1.56% [5].

Economic Outlook - Powell indicated a potential interest rate cut in September, with market expectations rising from below 80% to around 90% following his speech[1] - U.S. economic growth slowed from 2.5% last year to 1.2% in the first half of this year, primarily due to weakened consumer spending[2] - The average job creation in the private sector has dropped to 52,000 over the last three months, significantly lower than the 148,000 average during the last rate cut cycle in 2019[1] Labor Market Dynamics - The unemployment rate remains low at approximately 4.2%, but job creation has significantly declined, reflecting a shrinking labor market[1] - Factors contributing to reduced consumer spending include depleted excess savings, immigration policy impacts, and declining consumer confidence due to tariff uncertainties[2] Federal Reserve's Policy Adjustments - Powell's policy framework is shifting back to a flexible inflation target, moving away from the average inflation targeting introduced in 2020, which is deemed unsuitable in the current inflationary environment[3] - The independence of the Federal Reserve may be compromised, with significant political pressure from the White House influencing upcoming decisions[3] Market Reactions and Predictions - The market anticipates that the rate cut expectations may continue to rise until November, but the path to rate cuts may not be straightforward due to potential inflationary pressures[4] - The short-term U.S. Treasury yields are expected to decline, while the long-term yields face pressure from fiscal policies and international monetary conditions[4] Risks and Considerations - There are risks associated with unexpected movements in the U.S. economy, employment, and inflation trends, as well as potential surprises from fiscal and tariff policies[5]

Core Viewpoint - Federal Reserve Chairman Jerome Powell indicated a potential interest rate cut in September, while cautioning about rising risks in the labor market, which is a central theme of the current economic discussions [1][2]. Group 1: Interest Rate Outlook - Powell's remarks suggest that the Fed's policy remains in a restrictive range, with a shift in risk balance potentially necessitating a policy adjustment [1]. - The probability of a 25 basis point rate cut in September has risen to approximately 86%, according to the CME FedWatch tool [1]. - Powell emphasized that monetary policy does not have a preset path, leaving the extent and pace of any rate cuts for future discussion [1][2]. Group 2: Labor Market Concerns - Powell warned of increasing downside risks in the employment sector, which could manifest as a wave of layoffs if the trend continues [2]. - The average monthly increase in non-farm payrolls for July was only 35,000, significantly below the expected 168,000 for 2024 [1][2]. Group 3: Economic Conditions and Inflation - Powell noted that the current interest rate levels are closer to neutral than they were a year ago, suggesting that the restrictive nature of monetary policy has eased [2]. - Concerns were raised regarding the impact of tariffs from the Trump administration, which could lead to increased price pressures in the coming months, complicating the Fed's dual mandate [2]. - The market may be disappointed if it expects a rapid return to a low interest rate environment, as Powell implied that even if a rate cut occurs in September, it may not signal the start of a new easing cycle [2].

Core Viewpoint - The Federal Reserve's July meeting minutes indicate a consensus among members that the U.S. economy has experienced a slowdown in growth during the first half of the year, with persistent high inflation levels [1] Economic Activity - Economic activity and consumer spending growth have slowed, leading to significant downside risks in the U.S. labor market, which contributes to uncertainty in economic growth prospects [1] Inflation Concerns - Most Federal Reserve members express greater concern over inflation risks compared to the labor market, resulting in the decision to maintain the federal funds rate target range at 4.25% to 4.5% [1]

Group 1 - The Federal Reserve decided to maintain the federal funds rate target range at 4.25% - 4.5%, with two members voting against this decision [1] - Federal Reserve members expressed concerns about rising threats to the U.S. economy, highlighting that economic growth in the first half of the year was "tepid" [1] - Despite low unemployment rates, inflation remains high, with members pointing out uncertainties related to tariffs and the potential for inflation expectations to become unanchored [1] Group 2 - The majority of Federal Reserve members are more concerned about inflation risks than labor market conditions, leading to the decision to keep interest rates unchanged [1] - Only Vice Chair Bowman and Governor Waller voted against maintaining the current rate, advocating for a 25 basis point cut to prevent further weakening of the job market [1] - Since January, the Federal Reserve has repeatedly held rates steady, facing criticism from President Trump, who has pressured the Fed to lower rates [2]

Core Insights - Federal Reserve Governor Waller indicated that the economy and labor market face downside risks, while inflation is under upward pressure [1] - The impact of tariffs on inflation may become most pronounced in the second half of 2025 [1] Economic Outlook - The economy is experiencing potential downturns, which could affect overall growth and stability [1] - The labor market is also showing signs of vulnerability, suggesting a need for caution in economic forecasts [1] Inflation Concerns - Inflationary pressures are expected to rise, indicating challenges for monetary policy and consumer purchasing power [1] - The timing of tariff impacts on inflation suggests a delayed effect, with significant implications for economic planning and strategy in 2025 [1]