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CICC Macro: Powell announces September rate cut in advance
According to CICC Macro, Fed Chairman Powell released a clear signal of rate cut at the Jackson Hole meeting, and the September rate cut is a foregone conclusion.
Powell emphasized that the downside risks of employment have increased, the time for policy adjustment has come, and the Fed will do its best to support the labor market. But he did not express any views on the magnitude and speed of the rate cut, which leaves room for subsequent operations.
The baseline scenario is still that the Fed will cut interest rates by 25 basis points in September, and if the non-agricultural data is unexpectedly weak again, it may also cut interest rates by 50 basis points. The market reacted positively to Powell's early announcement of rate cuts because it responded to people's concerns that the Fed is "behind the curve".
Wall Street believes that if the labor market continues to be weak, the Fed will not hesitate to act.
