CITIC Securities: It is expected that the Federal Reserve will further cut interest rates by 25 basis points at the October and December policy meetings.

CITIC Securities' research report indicates that the Federal Reserve's interest rate cut of 25bps at the September meeting in 2025 is in line with market expectations. Powell stated that this is a risk-management style rate cut, with a focus on controlling the downside risks in the employment market within the dual mandate. The dot plot for this meeting shows the midpoint target rate for this year at 3.6%, lower than the 3.9% in June. At the same time, the forecast for the US economic growth rate for this year has been raised, while the forecasts for US inflation and unemployment rate remain unchanged. The dot plot suggests that there is still expected to be a total of 50bps rate cut this year, as we still expect the Federal Reserve to cut rates by 25bps in both the October and December meetings. The rate path for 2026 will become clearer once the final choice for the new Federal Reserve Chair is made. In terms of the market, after the rate cut, US Treasury bonds are once again demonstrating the "buy the rumor, sell the news" trend, and the "gap-up" pattern in US stocks continues, with the Dow Jones Industrial Average and small-cap stocks performing well. It is suggested to downplay the guidance for next year's rate path from this meeting, it is expected that the US dollar may remain weak in this round of rate cuts, and gold is expected to continue performing well.