Zhongjin: The Federal Reserve may find it difficult to cut interest rates in September.

The China Gold Research Report stated that the Federal Reserve kept the status quo at the September meeting, in line with market expectations. Two members opposed keeping interest rates unchanged, but Powell and the majority of officials are inclined to maintain a tightening stance: they believe that the inflation risks brought about by tariffs have not been resolved, and the labor market remains stable, therefore there are no conditions for a rate cut. Powell also emphasized the independence of the Federal Reserve, implying that it will not succumb to political pressure. We believe that in the coming months, the inflationary effects of tariffs will become more apparent, making it difficult for the Federal Reserve to cut rates in September. If Trump continues to escalate tariffs, the timing of a rate cut may be further delayed. As for Trump's pressure to cut rates, we believe that the market underestimates the Fed's determination to maintain its independence. The interest rate decision is made collectively by the 12 voting members, so even if Trump were to dismiss Powell, it would be difficult to change the course of monetary policy.