China International Capital Co said in a research note the Fed left rates
unchanged at the June meeting and significantly simplified its policy statement,
removing forward guidance to reduce Fed-market intervention. The Fed established
five working groups—communications, balance sheet, data, productivity and labor,
and inflation framework—with the balance-sheet review ranked second, signaling
balance-sheet reduction (QT) remains a core tilt. Fed leadership offered no
explicit guidance, but the dot plot shifted hawkish: the mean projects one rate
hike this year, reflecting firmer employment and persistent inflation and an
anti-inflation focus. China International Capital Co maintains its view that the
Fed will neither hike nor cut rates this year but warns the risk of a hike next
year has risen; sustained US growth driven by AI-led capex and a broad recovery
could prompt monetary tightening.
