According to a report from Jin10 on August 24, Citic Securities' research believes that 'Powell's speech at the Jackson Hole annual meeting aligns with our previous expectations, forecasting that the Federal Reserve will consecutively cut rates three times this year, each by 25bps.'
In terms of assets, we believe that the main line of 'rate cut trading' in the U.S. stock market will be clearly redefined, and the trading logic of 'catch-up' will dominate the upcoming U.S. stock market, similar to the rising market for interest rate-sensitive Russell 2000, S&P 500 Real Estate, and Nasdaq Biotechnology during the 'rate cut trading' in July 2024.
The market's expectations for the Federal Reserve's interest rate cuts this year still differ from our views, and we expect that U.S. Treasury yields and the dollar index still have slight downward space.
In terms of non-U.S. equities, Powell's dovish remarks and a weaker dollar are expected to boost global equity market risk appetite. Regarding gold, the expectations of interest rate cuts are favorable for gold prices, but caution is needed regarding potential negative impacts from a possible agreement between Russia and Ukraine.