Lates News

Bai Xue, Senior Deputy Director of the Research and Development Department at Oriental Credit Rating, said on September 18 that the probability of the Federal Reserve raising rates one more time within the year has risen significantly, but this does not mean the Fed will begin a continuous rate-hike cycle. First, although the current U.S. economy remains resilient, its K-shaped divergence is pronounced, the problem of a low household savings rate and declining consumption sustainability is gradually emerging, and the AI investment cycle may also face marginal weakening. Second, long-end U.S. Treasury yields have climbed to their highest level since 2007, and the spontaneous tightening of financial conditions has already placed substantial pressure on interest-rate-sensitive sectors, so the Fed still needs to carefully assess the cumulative effects of tightening policy. Third, the core purpose of this rate hike is to anchor inflation expectations and prevent inflation from becoming entrenched again; it is a phased policy adjustment, not a systemic tightening response to an overheating economy and a spiraling rise in inflation. At present, U.S. inflation has only seen a phased rebound and has not formed a wage-price spiral, and the fundamentals do not support continued rate hikes. After the September rate hike is implemented, if December inflation data remain strong, there may be one more rate hike. The Fed will then enter an observation period, watching at the 4.00%-4.25% rate level for progress in inflation falling back toward target, and then decide whether the next step is to hold, hike, or shift to rate cuts.