TechFlow, August 24 — According to Jinshi Data, CITIC Securities Research believes that "Powell's speech at the Jackson Hole symposium aligns with our previous expectations. We expect the Federal Reserve to cut interest rates three times this year, each by 25bps.
Regarding assets, we believe the main theme of 'rate-cut trading' in the U.S. stock market will become clear again, and the logic of 'catch-up gains' will dominate the upcoming U.S. equity market. A rally similar to July 2024—when rate-sensitive indices such as the Russell 2000, S&P 500 Real Estate, and Nasdaq Biotechnology rose during the 'rate-cut trade'—could re-emerge.
The market's expectation for Fed rate cuts this year still differs somewhat from our view. We expect U.S. Treasury yields and the U.S. dollar index to have limited further downside room.
For non-U.S. equities, Powell's dovish comments and a weaker dollar are expected to boost global equity market risk appetite. For gold, rate-cut expectations support higher prices, but potential downside risks may arise if Russia and Ukraine reach a deal."
