CICC suggests that the Federal Reserve should raise interest rates in September to maintain its credibility.

According to a research report by CICC, from the perspective of maintaining the Federal Reserve's credibility, it is best to raise interest rates in September—this is the key factor in deciding whether to hike rates. The "deliberate ambiguity" of FOMC member Waller in July led to market expectations becoming confused, and the U.S. Treasury term premium rose from 0.65% at the end of July to 0.9% in mid-August, forcing Waller to make a hawkish commitment at the Jackson Hole meeting. If the data weakens, the Federal Reserve likely still has some room to maneuver, but with nonfarm payrolls and inflation figures continuing to exceed expectations, the Fed is gradually being cornered. Although these short-term indicators each have their limitations, before the FOMC meeting, the Fed can only rely on such data. Imagine, if this meeting still "forcibly" refrains from raising rates, how would the market view the previous hawkish statements? It would likely only result in an even more severe trust crisis and a loss of control over U.S. Treasuries.