CICC: Do not overinterpret Powell's "dovish" stance.

[CICC: Do Not Overinterpret Powell's "Dovish"] CICC research report states that Fed Chairman Powell's speech at the Jackson Hole meeting was seen by the market as a "dovish" signal for monetary easing. However, we believe that Powell's remarks did not provide strong guidance on the persistence and magnitude of interest rate cuts, but rather clarified the Fed's policy "reaction function"—that is, when the risk to employment exceeds inflation, the Fed tends to lower interest rates. However, under significantly higher tariff rates and tightened immigration policies, employment and inflation risks coexist. If inflation risks surpass employment, Powell can still use the same "reaction function" to halt rate cuts. Therefore, the market should not view Powell's speech as the starting point for a series of easing measures, but should recognize the challenges facing monetary policy when employment and inflation targets conflict. If tariffs and immigration policies further exacerbate "stagflation-like" pressures, leaving the Fed in a dilemma, true monetary easing will not occur. Market risk appetite may decline, and fluctuations will intensify accordingly.