Huatai Fixed Income: The Federal Reserve's 25 basis point interest rate cut in September should be the benchmark scenario.

Huatai Securities fixed income research indicates that the current situation in the United States suggests that there is a downward risk to employment growth, and the change in the risk balance point may require policy adjustments. After Powell's speech, the market traded dovishly on the Fed, and the probability of a soft landing of the US economy increased, with prices of major asset classes rising across the board except for the US dollar. Looking at the subsequent monetary policy path, the Fed's policy inclination is expected to be more dovish, with a 25bp rate cut in September likely to be a benchmark scenario, and the probability of two 25bp cuts in the fourth quarter may be higher than one. If we further consider the impact of the Trump administration on the Fed, the magnitude of this round of easing may exceed market expectations.