Huatai Securities: Fed expected to raise rates by another 25bp at December meeting

Huatai Securities research report states that at the October meeting, Warsh provided better communication regarding the Fed's decision to keep interest rates unchanged, and long-term bond yields remained basically stable. Looking ahead, we maintain our previous view that the Fed will raise rates by another 25bp at the December meeting. On the one hand, forward-looking indicators suggest that October nonfarm payrolls may be weak, but there could be a rebound by year-end; meanwhile, there is a risk of escalation in the US-Iran conflict, oil prices are at high levels, and short-term inflationary pressure is relatively elevated. On the other hand, although financial conditions have tightened somewhat recently, Warsh believes that current credit conditions can hardly be called "tight," which means the Fed may further raise rates, also consistent with the guidance of the September dot plot.