【Today's Headlines】
Federal Reserve Chairman Powell: Inflation Expected to Remain Higher Than Anticipated, Monetary Policy Has Entered a &#34;New Phase&#34;
According to the Zhitong Finance APP, the Federal Reserve released its latest economic forecast summary on Wednesday, indicating that inflation will be more persistent than previously expected, with the core inflation rate projected to reach 2.5% by the end of 2025, up from the September forecast of 2.1%. This forecast suggests that inflation will remain above the Federal Reserve's 2% target level through 2025.
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Interest Rate Policy In the process of adjusting interest rates, we are in a new phase. Moving forward, we need to observe inflation developments and will not overreact to a few months of inflation data. The resolution statement implies that we are at or near a slowdown in the pace of interest rate cuts or pausing the rate cuts. We are closer to neutral, which is another basis for our caution. The timeline indicates that we are at or near a slowdown in the pace of adjusting interest rate policy.
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Inflation We have made considerable progress on inflation. We remain confident that &#34;inflation is on track to return to the target of 2%.&#34; We expect to achieve the inflation target in the next 1-2 years.
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Tariffs The analysis of tariffs from 2018 remains a good starting point. Past efforts have put us in a position to assess the implementation of any new tariffs.
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Cryptocurrency According to existing legislation on Capitol Hill, the Federal Reserve is not allowed to hold Bitcoin. The Federal Reserve does not seek to modify the law to be able to hold Bitcoin.
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In addition to lowering the benchmark interest rate, the Federal Reserve has also reduced the rate of a tool used to control the benchmark to maintain smooth operation in the U.S. financing market. According to Wednesday's policy statement, officials lowered the overnight reverse repurchase agreement tool rate by 5 basis points compared to the lower bound of the target range. Given that the Federal Reserve has lowered the federal funds rate to a target range of 4.25%-4.50%, the new RRP rate is 4.25%, aligning with the lower bound of the target range for the first time since 2021.
【Market Outlook】
Dow Jones Falls for the 10th Consecutive Day, Longest Losing Streak Since October 1974
As of the market close overnight, U.S. stocks fell after the Federal Reserve announced a 25 basis point rate cut, with Powell stating that the Federal Reserve is at or near a moment to slow down rate cuts. The Dow Jones fell for the 10th consecutive day, marking the longest losing streak since October 1974. The Dow dropped 1123.03 points, a decrease of 2.58%, closing at 42326.87 points; the Nasdaq fell 716.37 points, a decrease of 3.56%, closing at 19392.69 points; the S&amp;P 500 index fell 178.45 points, a decrease of 2.95%, closing at 5872.16 points. Tesla (TSLA.US) fell over 8%, Broadcom (AVGO.US) fell 6.9%, and NVIDIA (NVDA.US) fell 1%. The Nasdaq Golden Dragon China Index closed down 2.4%, with Alibaba (BABA.US) down 2.4%. The Hang Seng Index ADR fell, closing at 19557.17, down 307.38 points or 1.55% compared to the Hong Kong close.
【Hot Topics Ahead】
Central Rural Work Conference: Continuously Enhance the Supply Guarantee Capability of Important Agricultural Products Such as Grain, Stabilize Grain Planting Area
The Central Rural Work Conference was held in Beijing from the 17th to the 18th. The meeting emphasized the need to focus on learning and applying the experience of the &#34;Ten Million Project,&#34; advancing comprehensive rural revitalization, concentrating efforts on accomplishing a number of key practical matters, and striving to promote agricultural efficiency, rural vitality, and farmers' income. The meeting stressed the importance of improving the policy system for supporting grain production and initiating inter-provincial horizontal benefit compensation for grain production and sales areas under central coordination. It called for improving the coordination mechanism between agricultural product trade and production, and promoting the prices of important agricultural products such as grain to remain at reasonable levels. A diversified food supply system should be constructed, supporting the stable development of animal husbandry and establishing a long-term mechanism for saving grain and food.
The meeting emphasized the need to fully implement further deepening of rural reform tasks, orderly advancing the pilot program for extending land contracts for another thirty years after the expiration of the second round of land contracts, exploring effective ways to revitalize idle rural housing through leasing, equity participation, and cooperation, innovating the investment and financing mechanism for rural revitalization, and stimulating the vitality of rural revitalization.
Hong Kong Establishes Working Group to Promote Gold Market Development
The Hong Kong Special Administrative Region Government's Information Services Department announced on the 18th that the working group to promote gold market development has officially been established. The working group is chaired by the Secretary for Financial Services and the Treasury, Christopher Hui, and includes relevant officials from the Special Administrative Region government, as well as representatives from regulatory agencies, financial institutions, exchanges, and industry professionals. The working group will hold its first meeting this month and will invite other industry professionals to participate in discussions on specific topics. Christopher Hui stated that building an international gold trading center is a new entry point to consolidate and enhance Hong Kong's status as an international financial center. The Hong Kong SAR government will promote the establishment of international-level gold storage facilities, expand related financial services such as insurance, testing and certification, and logistics based on increasing storage capacity, while simultaneously expanding related derivative transactions such as mortgages, borrowing, and hedging, gradually building a complete ecosystem to promote comprehensive, multi-currency trading, clearing, delivery, and regulatory systems, forming a complete gold trading center, and exploring connectivity with the mainland financial market at the appropriate time.
Central Bank and Foreign Exchange Bureau Continue to Optimize Pilot Policies for Multinational Corporations' Integrated Currency Pool Business
In order to implement the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party of China and the Central Economic Work Conference, further deepen reforms, expand high-level opening up, and facilitate the collection and use of funds by multinational corporations, the People's Bank of China and the State Administration of Foreign Exchange have decided to optimize the pilot policies for multinational corporations' integrated currency pool business in ten provinces and cities, including Shanghai, Beijing, Jiangsu, Zhejiang, Guangdong, Hainan, Shaanxi, Ningbo, Qingdao, and Shenzhen.
Shenzhen Issues &#34;Several Measures for Building Shenzhen into a Pioneer City for Artificial Intelligence&#34;
The Shenzhen Municipal Bureau of Industry and Information Technology issued &#34;Several Measures for Building Shenzhen into a Pioneer City for Artificial Intelligence.&#34; Among them, it proposed to support the application of artificial intelligence in various industries. An annual investment of up to 100 million yuan will be made to promote the empowerment of artificial intelligence in key areas such as advanced manufacturing, modern services, and scientific research. For demonstration application projects with promotional value, a subsidy of up to 2 million yuan will be provided, not exceeding 30% of the actual investment made by the project construction entity; for benchmark application projects with leading roles, the subsidy standard can be increased, providing up to 10 million yuan in funding
The Biosecurity Bill Not Included in the CR Bill
According to relevant websites of the U.S. Congress, it was announced today that the Biosecurity Bill was not included in the 2025 Continuing Resolution (CR) bill that may be reviewed. Previously, reports indicated that supporters of the Biosecurity Bill attempted to push for its inclusion in the CR bill, following its exclusion from the 2025 National Defense Authorization Act.
U.S. Supreme Court to Discuss TikTok Ban Again
The U.S. Supreme Court announced on December 18 local time that it will revisit the legislation banning TikTok's operations in the United States. Reports indicate that the Supreme Court will debate the case on January 10, allowing the court to make a ruling on the issue before the law takes effect on January 19. The legislation requires TikTok's parent company, ByteDance, to divest TikTok, or else TikTok will be banned from operating in the U.S. ByteDance has made it clear that it will not sell TikTok's business.
Douyin Founder Zhang Yiming Enters Hong Kong Private Equity Industry
On December 18, it was reported that Cool River Venture HK Limited, founded by Douyin founder Zhang Yiming, obtained a Type 9 license, which is an asset management license, from the Hong Kong Securities and Futures Commission in November, with the license effective from November 21. With this license, the company can conduct asset management services in Hong Kong. Previously, several founders of internet companies have gone to Hong Kong to obtain asset management licenses. For example, in November 2023, GURRYSHARK Fund Management Company Limited obtained a Hong Kong Type 9 license. This institution is owned by a founder of a leading internet company and prefers investments in the technology sector.
GCL-Poly Energy (03800) Plans to Place Up to 1.56 Billion Shares, Net Raising About HKD 1.53 Billion
According to Zhitong Finance APP, GCL-Poly Energy (03800) announced that on December 18, 2024, the company plans to place up to 1.56 billion shares, equivalent to approximately 5.79% of the total issued share capital of the company as of the date of this announcement, and approximately 5.48% of the total issued share capital after the placement and issuance of the placed shares. The placement price is HKD 1.0 per share.
[Stock Highlights]
China Biologic Products Holdings (01177): Bemarituzumab injection combined or not combined with Anlotinib hydrochloride capsules achieved positive results in Phase III study for consolidation treatment after chemoradiotherapy in non-small cell lung cancer.
According to Zhitong Finance APP, China Biologic Products Holdings (01177) announced that the Phase III clinical study (TQB2450-III-05) of its self-developed Class 1 innovative drug Bemarituzumab injection, combined or not combined with Anlotinib hydrochloride capsules as consolidation treatment in patients with locally advanced/unresectable (Stage III) non-small cell lung cancer (NSCLC) who did not progress after synchronous/sequential chemoradiotherapy, has completed the pre-set interim analysis. The Independent Data Monitoring Committee (IDMC) determined that the primary endpoint of progression-free survival (PFS) reached the pre-set superiority threshold. The group has communicated with the Center for Drug Evaluation (CDE) of the National Medical Products Administration of China regarding the marketing application for this indication and has received written consent from the CDE to submit the application
The group will submit a listing application in the near future.
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Federal Reserve Chairman Jerome Powell stated that inflation is expected to remain higher than anticipated, and monetary policy has entered a new phase. The latest economic forecast indicates that the core inflation rate is expected to be 2.5% by the end of 2025. The Federal Reserve cut interest rates by 25 basis points, and the Dow Jones Industrial Average fell for the 10th consecutive day, marking the longest losing streak since 1974. The Federal Reserve will slow the pace of interest rate cuts and remain cautious about future inflation developments

- Federal Reserve Chairman Jerome Powell indicated that inflation is expected to remain higher than previously anticipated, with core inflation projected at 2.5% by the end of 2025.  
- The Fed is entering a new phase in monetary policy, suggesting a cautious approach to interest rate adjustments and a focus on inflation progress.  
- In related market news, the Dow Jones Industrial Average fell for the tenth consecutive day, marking its longest losing streak since 1974, as the Fed announced a 25 basis point rate cut.

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Zhitong Hong Kong Stocks Early Knowledge | The Federal Reserve's hawkish rate cut of 25 basis points, the Dow Jones fell for the 10th consecutive day