September 18, Macro:

Last night, the August retail sales data, which is known as the horror data, was released, which exceeded expectations. This has injected a shot of adrenaline into the market, and the expectation of funds for recession has weakened.

Tonight at 2 a.m. will usher in an important moment. The Federal Reserve will hold an interest rate decision meeting, and Federal Reserve Chairman Powell will hold a press conference at 2:30. At present, the probability of a 50 basis point rate cut given by CME has reached 66%, and the probability of a 25 basis point rate cut has been reduced to 34%.

Nick, the "mouthpiece" of the Federal Reserve, has published another article. If this article is instructed by the Federal Reserve, then the market will have a greater probability of a 50 basis point rate cut. The article implies that the Federal Reserve will cut interest rates by 50 basis points.

If the current round of interest rate cuts is 25 basis points, the differences in funds will be smaller, and the expectation of recession will also be weakened. However, if the interest rate is directly cut by 50 basis points, it may cause panic in the persimmon market, causing funds to leave the market and wait and see, which is not conducive to the price trend of risky assets.

For the first interest rate cut, the smaller the better. Compared with a large interest rate cut, a smaller interest rate cut will relieve market concerns and be more conducive to the stable operation of the capital market. So based on this logic, a 25 basis point interest rate cut would be relatively better.