Zhongjin: The Fed's 25BP rate cut in September is still the Benchmark scenario

Jinshi Data News on September 9th, CICC Research Report stated that in fact, this (non-agricultural and other) data provided the Federal Reserve with room and space. When the rise slows down but there is no evidence of a recession, the market expectation shows that a 25bp and 50bp rate cut in September can find a ‘reasonable’ argument. Although a 25bp rate cut may not convince the market to dispel recession concerns, a direct 50bp rate cut may lead to recession concerns. We believe that a 25bp rate cut is still the benchmark situation, not only because we do not believe that the current situation is a deep recession, but also because even if interest rates have not been cut, the easing effect has already begun to show. It is based on the starting point of interest rate cuts to solve the problem of high financing costs at all levels. We calculate that a static view of this round of interest rate cuts of about 100bp (4-5 times) can have an effect.