RMB Interbank Rate Reports 7.1418, Down 13 Points! US Bank Warns: Inflation Continues to Exceed Target, Adding Tariffs, Fed Cuts Unjustified in September
August 12, the RMB interbank rate reported 7.1418, down 13 points.
Probability of Fed Cuts in September is 85.9%
According to the CME "Fed Watch": The probability of the Fed keeping interest rates unchanged in September is 14.1%, while the probability of a 25-basis-point cut is 85.9%. The probability of keeping interest rates unchanged in October is 5.2%, and the cumulative probability of a 25-basis-point cut is 39.9%, with a cumulative probability of a 50-basis-point cut at 55.1%.
US Bank Warns: Inflation Continues to Exceed Target, Adding Tariffs; Fed Cuts in September Unjustified
The US bank has issued a latest research report warning that the Fed should curb its impulsive desire to cut interest rates at the September policy meeting, as recent economic data does not support the early launch of an easing cycle. The bank emphasizes that policymakers underestimate the impact of labor supply shocks and the persistence of inflation, which remains above the Fed's 2% target level. The report warns that the latest tariff hike may cause a "more severe and prolonged" shock to prices. "If interest rates are cut in September, we may face the risk of opening up an easing cycle before inflation has peaked," wrote the bank's analysis team, maintaining its base prediction that there will be no rate cuts this year. The report specifically notes that the US non-farm employment data revision increases the possibility of a so-called "passive rate cut" driven by labor market deterioration rather than anti-inflation gains.
Source: Sina News