20240801-招银国际-美国经济_临近降息_6页_1mb

Summary of Federal Reserve Policy and Market Impacts

Key Highlights:

• Fed Statement: The Federal Reserve confirmed greater progress in inflation reduction, removed language "highly attentive to inflation risks," and emphasized ongoing employment cooling. These changes support the Fed's path toward interest rate cuts.
• Policy Shifts: Chairman Powell indicated that the Federal Open Market Committee (FOMC) is approaching a potential rate cut, with September as the earliest possible date.
• Monetary Policy Path: The Fed is expected to cut rates starting in September 2024, followed by cuts in December 2024 and four more in 2025, bringing the federal funds rate to roughly 3.85% (target interval 3.75%-4.00%) by the end of 2025.

Global Market Impacts:

• U.S. Assets: U.S. stocks, bonds, oil, gold, and the yen showed gains following the Fed's announcement and Powell's remarks.
• Bond Yields: Long-term U.S. Treasury yields are expected to moderately decline to 4% by the end of 2024 and 3.9% by the end of 2025, reflecting market expectations of lower rates.
• Dollar Index: The dollar index is projected to fall to 104 by year-end and 101 by 2025, supporting emerging markets and stocks.
• Global Equity Markets: Emerging market currencies and equities are expected to benefit from Fed rate cuts and a potential weakening of the dollar.

Additional key points include the role of cooling inflation and rising unemployment in driving further Fed cuts, anticipated GDP growth slowdowns, and expected impacts on consumer spending and housing inflation.