Core Viewpoint - The likelihood of the Federal Reserve changing its 2% inflation target is minimal, but discussions around alternative targets may intensify as the composition of the Federal Reserve Board changes and Powell's term ends in May next year [1][4]. Inflation Performance - The U.S. inflation rate is expected to show that it has exceeded the Federal Reserve's 2% target for 54 consecutive months, which is a rare occurrence for a central bank [1][3]. - The median expectation among Federal Reserve officials indicates that overall Personal Consumption Expenditures (PCE) inflation and core PCE inflation may not return to 2% until 2028, and even this timeline may be difficult to achieve [3]. Employment and Monetary Policy - The dual mandate of the Federal Reserve includes "full employment and price stability," but rising risks in the employment sector have prompted a restart of the rate-cutting cycle [3]. - Current financial conditions are among the most accommodative in years, with economic growth remaining robust, suggesting that rate cuts could further exacerbate inflationary pressures [3]. Trust in Inflation Targeting - The longer the Federal Reserve fails to meet its inflation target, the more likely public trust in the "inflation target itself" and the overall policy-making of the Federal Reserve may be undermined [3]. Potential Shift to Inflation Range - There is a possibility of adopting an "inflation range" as an alternative to the current target, which some Federal Reserve officials, including Atlanta Fed President Bostic, have shown openness to [5]. - Bostic suggested that a range of 1.75% to 2.25% could be a reasonable starting point, emphasizing that this approach would provide greater flexibility for policymakers [5]. Advantages and Disadvantages of Inflation Range - An "inflation range" could allow the Federal Reserve to avoid being technically in violation of its target even if inflation exceeds 2%, as long as it remains within the defined range [5]. - However, a wider range could lead to accumulated pressure if inflation spirals out of control, potentially forcing the Federal Reserve to implement overly aggressive and uncomfortable policy measures [6]. Global Context and Consumer Expectations - While the "inflation range" approach is more common in emerging markets, developed economies like Canada, Australia, and New Zealand have also adopted it, although central banks generally prefer more precise inflation targets [8]. - Consumer expectations for inflation are notably high, with a one-year expectation of 4.8% and a five-year expectation of 3.9%, which could lead to a "wage-price spiral" if not addressed [8].

Group 1 - The Federal Reserve announced a 25 basis point interest rate cut on September 17, which was seen as a victory for Trump after months of pressure [2][4] - Trump's expectation was for a larger cut of at least 50 basis points, as he had previously claimed that rates were at least 300 basis points too high [2][4] - The Federal Reserve's stance indicated that this rate cut was a "risk management" move and not a signal for extensive monetary easing, which contradicted Trump's desires [4][5] Group 2 - The voting results from the Federal Open Market Committee showed 11 members in favor of the 25 basis point cut, with only Trump's nominee voting against it, highlighting a lack of support for Trump's influence [5][7] - Market reactions post-announcement were mixed, with the Dow Jones rising slightly while the Nasdaq fell, indicating skepticism about the effectiveness of the rate cut [7][9] - The U.S. national debt has surpassed $37 trillion, with interest payments projected to consume a significant portion of the federal budget, raising concerns about long-term economic stability [9][14] Group 3 - The potential for a "debt spiral" is a concern, as increased borrowing to stimulate the economy could lead to higher interest payments, further straining the budget [12][14] - Inflation remains a persistent issue, with consumer prices rising due to tariffs, which could complicate the Federal Reserve's ability to manage monetary policy effectively [12][14] - Projections indicate that by 2025, U.S. GDP growth may slow to 1.6%, with interest payments on the national debt reaching a historic high as a percentage of GDP [14][15]

智通财经APP获悉，顽固的通胀已经成为英国财政大臣里夫斯(Rachel Reeves)首份预算案的最大弊端之 一。而在第二份预算案中，她有可能重蹈覆辙。 近几日，英国商业团体警告称，工党政府在税收、就业权利和最低工资方面的政策，可能会给企业带来 数十亿英镑的运营成本，并推动物价在未来一年继续上涨。他们表示，这一次冲击可能更为尖锐，因为 企业利润空间更小，更难以在不转嫁成本的情况下消化压力。 英国商会发言人Steve Partridge表示："我们在本次预算中的头号诉求是：不要再提高对企业的税 收。""目前唯一能够消化这些成本的方式，就是通过涨价。" 由于受到英国首相斯塔默(Keir Starmer)竞选承诺——不伤害"劳动人民"(即不提高所得税或增值税)—— 的约束，里夫斯在去年10月的首份预算案中选择通过增加雇主工资缴纳份额260亿英镑(350亿美元)来平 衡预算。她还大幅上调了最低工资，这是工党14年来首份财政计划的核心内容。 将近一年后，人们普遍认为这些政策助推了通胀上升。英国央行最近也加入了预算责任办公室(OBR)的 行列，对此表示担忧。去年里夫斯宣布财政计划时，消费者价格指数(CPI)还徘徊在政府2 ...

Group 1: Jackson Hole Conference Insights - The Jackson Hole Economic Symposium is an annual event held by the Kansas Federal Reserve, where central bank leaders discuss monetary policy adjustments[2] - Powell's recent speech indicated a shift towards a dovish stance, suggesting a potential interest rate cut in September due to increasing employment risks[3][11] Group 2: Economic Indicators and Risks - Employment risks are rising, with a peculiar balance in the labor market due to significant supply-demand slowdown, potentially leading to increased layoffs and unemployment[3][12] - The likelihood of tariffs causing sustained inflation is deemed low, with current price impacts expected to be temporary[3][12] Group 3: Interest Rate Projections - Following Powell's speech, the probability of a September rate cut increased from 72% to 81.3%, with the average expected cuts for the year rising from 1.91 to 2.18 times[4][14] - The current policy rate appears slightly ahead of estimated levels, indicating that any rate cuts may be more preventive rather than recession-driven[4][14] Group 4: Market Reactions and Framework Adjustments - In a preventive rate cut scenario, U.S. stock indices typically rise, supported by resilient earnings, while long-term U.S. Treasury yields are likely to decline[5][19] - The Fed is shifting from an average inflation targeting framework to a flexible inflation targeting approach, allowing for more adaptability in response to economic conditions[6][20][25]

Core Viewpoint - The article discusses the likelihood of the Federal Reserve restarting interest rate cuts in September, with expectations of 3-4 cuts totaling 75-100 basis points, influenced by recent employment data revisions and political pressures from the Trump administration [1][10][13]. Group 1: Macroeconomic Analysis - Powell has adopted a dovish stance, indicating a shift in risk balance towards a downward trend in employment and a temporary inflation outlook [3][10]. - The current state of full employment is attributed to a unique balance from simultaneous supply and demand contractions, with significant downward risks anticipated for future employment [3][9]. - Economic growth has notably slowed, with actual GDP growth in the first half of the year at 1.2%, significantly lower than the projected 2.5% for 2024, largely due to a slowdown in consumer expansion [9][10]. Group 2: Monetary Policy - The Federal Reserve is expected to restart rate cuts, with Powell signaling that the current policy remains restrictive and may need adjustment based on economic outlook and risk balance [10][11]. - The Fed has made two key adjustments to its monetary policy framework: eliminating the inflation compensation strategy and shifting focus from solely full employment to also considering risks of both overheating and cooling in the job market [11][12]. Group 3: Impacts and Outlook - The anticipated rate cuts, combined with the effects of the "Big and Beautiful" legislation, are likely to lead the U.S. macroeconomic policy into a phase of "dual easing," potentially strengthening the economy and employment [13]. - Inflation risks may pose a threat to the upcoming midterm elections, prompting a possible shift in the Trump administration's approach to a combination of "expansive fiscal and stable monetary" policies [13]. Group 4: Market Reactions and Strategies - Market expectations for rate cuts have surged, with significant declines in U.S. Treasury yields across various maturities and a drop in the dollar index [14]. - Recommendations include cautiously going long on U.S. Treasuries with shorter durations while being wary of long-duration bonds, and maintaining a short position on the dollar with an awareness of potential reversal risks in the fourth quarter [15].

Core Viewpoint - The article discusses the phenomenon of stagflation, characterized by the coexistence of high inflation and high unemployment, which challenges traditional economic theories and policies [2][9]. Group 1: Definition and Characteristics of Stagflation - Stagflation is defined as an economic condition where stagnation (slow or negative growth) and inflation (rising prices) occur simultaneously [3]. - It disrupts the traditional trade-off between inflation and unemployment, leading to a complex economic environment [2]. Group 2: Causes of Stagflation - Supply shocks, such as sudden increases in oil prices, are classic causes of stagflation, leading to higher costs and reduced economic activity [2][7]. - Poor economic policies, including overly loose monetary and fiscal measures, can exacerbate inflation without addressing stagnation [2][7]. - Other contributing factors include restrictive production policies, wage-price spirals, and self-fulfilling inflation expectations [7]. Group 3: Historical Context and Market Reactions - The 1970s in the U.S. serve as a historical example of stagflation, marked by high inflation rates reaching nearly 15% and unemployment rates exceeding 8% [6][8]. - The stock market suffered significantly during this period, with the Dow Jones Industrial Average showing little to no growth, and many previously popular stocks collapsing [6][8]. - Bond markets also faced challenges, with rising interest rates leading to falling bond prices and negative real yields [8][12]. Group 4: Policy Responses to Stagflation - Initial policy responses included price and wage controls, which failed to resolve underlying issues and led to market distortions [8]. - The later approach involved aggressive monetary tightening under Federal Reserve Chairman Paul Volcker, which successfully reduced inflation but resulted in a severe economic recession [8][9]. - The experience of the 1970s highlights the dilemma policymakers face: stimulating the economy can worsen inflation, while tightening can deepen stagnation [9]. Group 5: Implications for Current Economic Conditions - Understanding the causes and historical responses to stagflation is crucial for analyzing current economic conditions in the U.S. and globally [10].