Minsheng Securities: Powell Showed Both a "Hawk" and a "Dove" Side

On July 31 (UTC+8), Minsheng Securities' research report stated that the July interest rate meeting was an important attempt. Powell showed both "hawkish" and "dovish" sides. The "hawk" is that he still doesn't budge on interest rate cuts and doesn't bow to pressure; the "dove" is that the threshold for the Fed's policy shift has been lowered—if the data for the next two months (before the September interest rate meeting) is not good, it can also become a reason for interest rate cuts, which was not enough in previous years. However, from the current point of view, the market values the "hawkish" side more. The dollar index rose sharply overnight, once approaching 100. It is worth noting that reversing expectations may only require one non-farm payroll data that falls short of expectations. Looking ahead, how to objectively assess the subsequent US macroeconomic fundamentals is crucial for both the Federal Reserve and the market. For the September FOMC, we agree with the market that a rate cut is the baseline scenario. [Jin10]