China International Capital Co says market focus is Jackson Hole and a speech by
Wash. His prior comment to “let the market do the Fed’s tightening” failed to
ease inflation worries; combined with failed U.S. Treasury intervention this
eroded policy credibility and pushed U.S. yields higher. CICC expects Wash to
reiterate inflation risks and preserve the option to hike to rebuild
credibility, while continuing to push for reduced central‑bank intervention and
less frequent communication. He has not abandoned a “balance‑sheet reduction +
rate cuts” policy concept, but its underlying assumptions appear misaligned with
current conditions and need clearer coordination. If Wash demonstrates policy
flexibility, pressure on U.S. Treasuries could ease and the dollar be supported;
if not, trust may continue to fade, long‑end U.S. yields could rise further and
the dollar come under pressure.
