CICC: The Fed may find it difficult to cut interest rates in September

On July 31, according to Jinshi Data, CICC's research report stated that the Federal Reserve's decision to hold steady at its September meeting was in line with market expectations. Two governors opposed keeping interest rates unchanged, but Powell and most officials favored maintaining tightening: they believe that the inflationary risks brought about by tariffs have not yet been eliminated, and the labor market remains solid, so there are no conditions for a rate cut. Powell also emphasized the independence of the Federal Reserve, suggesting that he would not succumb to political pressure. We believe that the inflationary effects of tariffs will become more apparent in the coming months, and the Federal Reserve may find it difficult to cut interest rates in September. If Trump's tariffs continue to increase, the timing of a rate cut may be further delayed. As for Trump's pressure to demand a rate cut, we believe that the market underestimates the Federal Reserve's determination to maintain its independence. Interest rate decisions are made jointly by 12 voting members, and even if Trump fires Powell, it will be difficult to change the direction of monetary policy. [Techflow]