Huatai Securities: Necessity of Fed Rate Hike in October Decreases, December Hike Expected

Huatai Securities' research report indicates that after the Federal Reserve raised interest rates in September, December may be a critical moment for the next rate hike. Currently, the market estimates the probability of a Fed rate hike in October to be over 50%. However, Huatai Securities believes that the weakening fiscal impulse, the increasing impact of oil prices on consumption, and tightening financial conditions have led to a decreased necessity for a rate hike in October. A rate hike in December is expected to be the baseline scenario. The future rate hike path for 2027 will depend on subsequent economic data, particularly improvements in the labor market, a rebound in wage growth, and inflation trends.