CITIC Securities says rapid AI-led growth has lifted headline US activity but masks sectoral divergence: production and credit are overheated while employment and household demand remain soft. The firm judges Fed policy is more likely to be swayed by political forces than by fundamentals; some Fed officials may coordinate with the Treasury to compress long-term yields. Post-midterms, reduced uncertainty could be a short-term positive for risk assets, though increased political polarization could

CITIC Securities says rapid AI-led growth has lifted headline US activity but masks sectoral divergence: production and credit are overheated while employment and household demand remain soft. The firm judges Fed policy is more likely to be swayed by political forces than by fundamentals; some Fed officials may coordinate with the Treasury to compress long-term yields. Post-midterms, reduced uncertainty could be a short-term positive for risk assets, though increased political polarization could create fresh shocks. Asset scenarios: base-case “hot continuation” — US equities, gold and China A-shares outperform, bonds lag; alternative “cold diffusion” — US Treasuries, gold and A-shares lead. Gold is bullish across scenarios.