CICC: From the perspective of safeguarding the Fed's credibility, the Fed had better hike rates in September

Odaily News: A CICC research report states that from the perspective of safeguarding the Fed's credibility, it would be best to hike rates in September, and this is the key factor determining whether rates should be raised or not. In July, Warsh's "deliberate ambiguity" at the FOMC plunged market expectations into confusion, and the U.S. Treasury term premium rose from 0.65% at the end of July to 0.9% in mid-August, forcing Warsh to make a hawkish commitment at the Jackson Hole conference. If the data weaken, the Fed probably still has room to maneuver, but as nonfarm payrolls and inflation successively exceeded expectations, the Fed has been gradually backed into a corner. Although these short-term indicators all have limitations, before the FOMC there is little choice but to rely on these data. Imagine, if this meeting still "forces a hold," how would the market view the previous hawkish statements? It would probably only create a more serious crisis of confidence and runaway U.S. Treasury yields. (Jinshi)