1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The Fed's interest rate cut of 25bp at the FOMC meeting and the announcement to stop balance - sheet reduction in December were in line with market expectations for the former and slightly exceeded expectations for the latter. However, there were still internal differences within the Fed, and Powell's speech was hawkish, leading to a bear - flattening of US Treasuries, a stronger US dollar, and a weaker US stock market. In the short term, the 10 - year US Treasury yield may fluctuate between 3.8% - 4.2%, and the US dollar index may fluctuate between 97 - 100. In the long run, as the US government shutdown prolongs and economic uncertainty rises, the probability of a December rate cut by the Fed remains high, with a bull - steepening of US Treasuries and a weakening US dollar as the general trend. The RMB exchange rate can be viewed optimistically, and the autonomy of domestic monetary policy and Chinese bonds has increased, keeping the domestic bond market in a favorable position [2]. - The tone of the FOMC resolution was mild, but internal differences intensified. The description of economic growth was adjusted, and two governors voted against the resolution, with different stances on rate cuts. The market reaction was mild within five minutes after the resolution was issued [2][5]. - Powell's speech at the press conference was hawkish, emphasizing the uncertainty of a December rate cut. The market began to trade based on this expectation, with stock prices falling, bond yields rising, and the US dollar strengthening [2][17]. - In the short term, US Treasuries may show a bear - flattening trend, and the US dollar will strengthen. For China, the possibility of a rate cut in the fourth quarter is low, and the domestic bond market is in a favorable position [2][20]. 3. Summary According to the Directory 3.1 What to Focus on in the Fed's Interest Rate Meeting 3.1.1 The FOMC Resolution's Tone was Mild, but Differences Increased - In October 2025, compared with September, the FOMC resolution had four key points: the description of economic growth was adjusted, more time limits were added, two governors voted against the 25bp rate cut, and the balance - sheet reduction would stop in December [5]. - The market had fully priced in the 25bp rate cut in October, but the more rigorous description of the fundamentals and the opposing votes indicated intensified internal differences within the FOMC [8]. - The suspension of balance - sheet reduction may be due to the increase in fiscal deposits and short - term debt issuance since July. It is estimated that this will lower the 10 - year Treasury rate by 1 - 2 basis points at the central level and 6 - 8 basis points at the peak [11]. - The market reaction was mild within five minutes after the resolution was issued, with the S&P 500 falling 0.11%, the 2 - year US Treasury yield down 0.61BP, the 10 - year US Treasury yield down 0.38BP, spot gold rising, and the US dollar index weakening slightly [11]. 3.1.2 The Press Conference Speech was Hawkish, Emphasizing the Divergence in the December Rate - Cut Path - Powell emphasized that there were strong differences within the committee regarding the December rate - cut decision. He also mentioned that a government shutdown leading to data delays would create high economic uncertainty, justifying a pause in rate cuts [17]. - The Fed has cut rates by 150 basis points so far in this cycle, and most voting members' estimates of the neutral rate are between 3% - 4%. In December, maturing securities will be rolled over in the form of short - term Treasuries to avoid exacerbating liquidity shortages [17]. - The market started to trade the expectation of no December rate cut after Powell's speech, with the S&P 500 falling 0.26%, the 2 - year US Treasury yield rising 5.11BP, the 10 - year US Treasury yield rising 3.08bp, spot gold prices falling, and the US dollar index rising 0.34% [19]. 3.2 How to View the Market - In the short term, the US Treasury yield curve may show a bear - flattening trend, with the 2 - year US Treasury rate expected to fluctuate between 3.44% - 3.84% and the 10 - year US Treasury rate between 3.81% - 4.21% [20]. - In the short term, the US dollar index may remain strong, fluctuating between 97 - 100, due to positive news on the Sino - US trade agreement and the unclear December rate - cut path of the Fed [20]. - In the medium term, Fed easing is still likely, with a bull - steepening of US Treasuries and a weakening US dollar as the general trend [20]. - For China, the possibility of a rate cut in the fourth quarter is low. The Chinese bond market is expected to perform well, and a long - position mindset is recommended [20].

Report Industry Investment Rating No relevant content provided. Core Views - FOMC resolution is moderate, still emphasizing economic uncertainty. The federal funds rate remains unchanged as expected. There is a certain degree of divergence in views within the Fed, and the market price reaction is relatively small after the resolution is issued [4]. - The press - conference speech is hawkish, strengthening the view of not setting a rate - cut path. Powell indicates that it's inappropriate to use the previous rate - cut path prediction, and the market starts to price in no rate cut in September [4]. - In the short term, the US Treasury yield curve may show a bear - flattening trend, and the US dollar may strengthen. In the medium - to - long term, factors may cause the US dollar index to decline, and the downward direction of bond yields in China remains unchanged [4]. Summary by Directory 1. What to focus on in the Fed's interest - rate meeting? 1.1 FOMC resolution is moderate, still emphasizing economic uncertainty - The description of economic growth in the fundamental assessment is adjusted to indicate that the Fed defines the US GDP growth in H1 2025 as a slowdown [7]. - The description in the risk assessment shows that the Fed believes the economic outlook is not clearer and needs more data for the next step [7]. - Two Fed governors oppose the resolution, indicating differences within the Fed on inflation expectations and policy goals [7]. - The market has a relatively mild immediate reaction after the resolution is released [10]. 1.2 The press - conference speech is hawkish, strengthening the view of not setting a rate - cut path - Powell believes it's inappropriate to use the previous rate - cut path prediction [13]. - He thinks the inflation transmission path of tariffs is not clear, and the impact on consumption terminals needs more information [14]. - He believes the labor market is roughly balanced and consistent with maximum employment [14]. - The market starts to price in no rate cut in September after his speech [15]. 2. How to view the market? - In the short term, the US Treasury yield curve may show a bear - flattening trend, with the two - year US Treasury rate expected to fluctuate between 3.8% - 4.2% and the 10 - year US Treasury rate between 4.25% - 4.65% [18]. - In the short term, the US dollar index may maintain strength and rise above 100 due to tariff negotiation details and expected strong yields of US dollar assets [18]. - In the medium - to - long term, factors may cause the US dollar index to decline, and the downward direction of bond yields in China is determined by domestic economic and policy rhythms [20].