CICC: Federal Reserve sets conditions for rate cut in September

CICC research report stated that Federal Reserve Chairman Powell has raised the possibility of a rate cut in September, but it would require continuous slowing of inflation and cooling of the labor market. We believe that the Fed has a certain inclination towards a rate cut, but officials still want to see more data supporting the decision rather than making a premature move. This means that a rate cut in September may or may not happen. The possibility of no rate cut stems from the fact that the US economy is still performing well, and the reasons for a rate cut may not be compelling enough. In summary, current US economic indicators are showing mixed signals with some weakening and some recovering. For the Fed, the best strategy is to remain patient and take action after the economic data meets the criteria for a rate cut