Analysts at the German Central Cooperative Bank predict that the Federal Reserve will maintain interest rates at 4.25%-4.50% this week, primarily due to strong economic data, persistent inflationary pressures, and potential impacts from tariffs. The Federal Reserve will observe the effects of Trump's policies on employment and prices, postponing any rate cuts until 2026.

Analysis by Qin Ge

The essence of the policy deadlock: core inflation stickiness (housing/healthcare > 4%) combined with tariff transmission risks (which could push CPI up by 0.8%), forces the Fed to sacrifice employment to maintain price stability; market impact: the continuation of high interest rates suppresses risk assets, Bitcoin struggles to break the $110,000 resistance, and U.S. stock valuations are under pressure (the S&P 500 price-to-earnings ratio is at a historical high of 24 times); hedging strategy: increase holdings in short-term bonds SHY (yield 4.8%) and gold, while avoiding interest-sensitive tech stocks. If the August non-farm unemployment rate exceeds 4.5%, it may trigger expectations for a policy shift.