The Federal Reserve Sends Two Positive Signals

A major positive factor for today's market is the easing expectations signaled by the Federal Reserve.

This expectation stems primarily from two factors: First, Federal Reserve Vice Chairman Michelle Bowman expressed support for a September rate cut and believes there will be three cuts this year, each by 25 basis points. Previously, Federal Reserve Chairman Powell had indicated a maximum of two rate cuts this year (each around 25 basis points), while the market generally expected one. If Bowman's prediction pans out, it will undoubtedly significantly exceed expectations. Notably, this view aligns with JPMorgan Chase's recent forecast, which believes that price increases caused by the tariff war will not drive inflation and that a US interest rate cut is imminent. This is also a key factor in the strong performance of the A-share market today—the Fed's rate cut is a direct positive for global stock markets, and as A-shares are a key focus for investors, expectations of foreign capital inflows are further strengthened.

Second, US Treasury Secretary Janet Yellen announced yesterday that she is leading the search for a successor to Federal Reserve Chairman Powell. Considering previous reports of dissatisfaction with Powell, it's highly likely that he will step down after his term ends (May 2026). The early launch of the successor selection process demonstrates the momentum behind this issue. The replacement of the Fed Chair also suggests a push for interest rate cuts, further strengthening expectations of a rate cut next year.

Taken together, these two pieces of information fuel expectations of a Fed rate cut. Even if the pace of rate cuts this year is slow, they are expected to accelerate next year. With these expectations, the capital market is leaning towards more proactive positioning, particularly in the stock and commodity markets, which are both showing positive expectations. #美联储比特币储备 #CPI数据来袭 #以太坊生态回暖