CITIC Securities says having missed this round’s rate-hike window, US equity valuations face near-term pressure regardless of whether the Fed hikes in September; medium-to-long term, realized rate hikes could relieve valuation suppression. The Productivity and Employment Task Force’s positive tilt toward AI supports a durable US AI narrative. At the July 29 FOMC the Fed held for a fifth meeting; three voters supported a 25bp increase, signaling publicized internal divisions and a market split of

CITIC Securities says having missed this round’s rate-hike window, US equity valuations face near-term pressure regardless of whether the Fed hikes in September; medium-to-long term, realized rate hikes could relieve valuation suppression. The Productivity and Employment Task Force’s positive tilt toward AI supports a durable US AI narrative. At the July 29 FOMC the Fed held for a fifth meeting; three voters supported a 25bp increase, signaling publicized internal divisions and a market split of short-end dovishness versus long-end hawkishness. Rising inflation expectations are capping the dollar and may open a window for Japan MOF FX intervention. Strong growth in CSP cloud businesses partially eases concerns about the sustainability of AI’s large capex. Rate-sensitive sectors, high-valuation/low-growth segments and small caps are under pressure; the next potential liquidity pivot is Jackson Hole at end-August or the September policy meeting.