Guotai Haitong: Geopolitics remains the key pricing anchor for current assets.

Guotai Haitong released a research report stating that a Fed rate hike will not provide effective support to the market, and the recent market rebound mainly stems from the release of favorable geopolitical information. Currently, Trump faces multiple pressures including the midterm elections, the severe impact of tariffs, high inflation, and the U.S. debt "crisis," making the geopolitical situation a key bargaining chip. U.S.-Iran peace talks face a new round of opportunities, and recent developments in the geopolitical situation warrant close attention. Guotai Haitong's main views are as follows: The bank believes that the recent market rebound is not driven by support from a Fed rate hike, but rather from the release of short-term geopolitical easing signals. The bank has previously analyzed in its reports that a Fed rate hike is unlikely to provide effective support for asset prices, and the impact of not hiking would be even greater, as it would raise questions about the Fed's credibility and Warsh's independence, while a hike would also bring short-term liquidity tightening. Therefore, the bank believes that the asset price rebound after the rate hike took effect cannot be explained by the Fed rate hike. The recent release of U.S.-Iran easing-related news, at a time when the Fed rate hike did not boost asset prices (on September 16 U.S. Eastern Time, after the Fed's FOMC meeting that day, all three major U.S. stock indices declined), constituted a positive for liquidity and the market. Currently, Trump faces multiple pressures including the midterm elections, the severe impact of tariffs, high inflation, and the U.S. debt "crisis," making the geopolitical situation a key bargaining chip. Bets on Polymarket show that as of September 20, 2026, traders generally expect Democrats to retake control of the House of Representatives, while control of the Senate remains fiercely contested, with recent probabilities tilting toward Democrats. U.S. inflation stickiness, persistence, and breadth have exceeded expectations. Surging U.S. Treasury yields and fiscal strain have made U.S. fiscal-monetary coordination more difficult. U.S.-Iran geopolitics has become a key variable, with market logic clearly pointing to: U.S.-Iran easing oil price decline inflation expectations cooling Fed rate hike expectations loosening U.S. Treasury yields falling. Therefore, the bank believes that the current U.S. ruling party has a stronger incentive to ease U.S.-Iran geopolitical risks, and the U.S.-Iran issue has become the core pricing anchor for recent asset prices. Currently, U.S.-Iran peace talks face multiple opportunities, and the next direction of the geopolitical situation warrants close attention. On the one hand, Iran has already proposed ceasefire conditions to the U.S., providing a premise and basis for a new round of U.S.-Iran peace talks. On the other hand, U.S. President Trump is expected to attend the United Nations General Assembly in New York on September 22 and meet with leaders or foreign ministers of Gulf Cooperation Council member states to discuss the next steps in the Iran war, with the meeting focusing on the U.S. strategic vision after the end of the war with Iran. Currently, with Trump facing multiple internal and external pressures, U.S.-Iran easing may usher in new opportunities. If U.S.-Iran tensions ease and oil prices decline relatively, U.S. inflation expectations will decline, U.S. Treasury yields will move downward, and liquidity-driven assets such as U.S. equities and gold will benefit, with global liquidity improving; if U.S.-Iran tensions persist, the market may remain range-bound. Last week's global asset price performance: crude oil fell, gold rose, and global stock markets showed mixed performance. Last week (2026.9.11-2026.9.18), in terms of markets, the Brent crude oil continuous futures settlement price was $103.87/barrel, down 0.71% from the previous week; the COMEX gold continuous futures closing price was $4,385.90/ounce, up 0.17%; the U.S. dollar index was 100.22, up 1.14%; the U.S. 10-year Treasury yield was 5.01%, up 5BP from the previous week. In global stock markets, among major indices, the three best performers were: Taiwan Weighted Index 2.16%, Hang Seng Tech Index 1.97%, and Tokyo Nikkei 225 Index 1.57%. The three worst performers were: U.S. Dow Jones Industrial Average -1.69%, Paris CAC 40 Index -1.40%, and Sao Paulo IBOVESPA Index -1.06%. Economy: U.S. employment and inflation exceeded expectations, and the Fed may continue to hike rates. In August 2026, U.S. nonfarm payrolls increased by 162,000, far exceeding market expectations (55,000), and the unemployment rate remained stable at 4.1%. The core CPI month-over-month growth rate rebounded by 0.1 percentage point to 0.3%, exceeding the market's psychological threshold for tolerating the Fed not hiking rates (0.2%). On September 16, the Fed's 25BP rate hike took effect, and according to the dot plot, there may still be one more rate hike within the year. Risk warning: The trajectory of the U.S.-Iran conflict still carries great uncertainty; a Fed rate hike exceeding expectations may trigger market shocks.