After the Fed's interest rate decision, as expected, it announced to keep interest rates unchanged, maintaining the federal funds rate in the range of 5.25 to 5.5%, and mentioned that the 2% inflation target has made some further progress. Fed Chairman Powell hinted at a press conference after the meeting that the authorities could possibly start a rate cut cycle as early as September. The market generally believes that the chance of a rate cut by the Fed in September is high, but Hang Seng predicts that the Fed's rate cuts this year will be limited, and Hong Kong dollar interest rates may remain at relatively high levels in the second half of the year; Shenbo Investment believes that the market's assumption of a rate cut in September is a misjudgment, emphasizing that if inflation data does not meet the standard, it could disrupt the rate cut plan. Fidelity International's macro and strategic asset team stated that the Fed, as expected by the market, kept interest rates unchanged for the 8th consecutive time. However, due to clear progress in inflation and the labor market, it signaled the possibility of a rate cut by the authorities. The trend of slowing inflation has spread from commodities to core services excluding housing and housing services prices; employment levels have returned to pre-epidemic levels, but the maximum target is facing downside risks, and caution is being maintained against potential sharp declines. Fidelity pointed out that Powell revealed the possibility of starting a rate cut cycle in September. Although this interest rate meeting lacked forward-looking guidance, the post-meeting statement and press conference still released strong signals. If inflation continues to slow as expected, economic growth maintains a reasonable strong level, and the labor market remains stable, there is potential for a rate cut discussion as early as the September interest rate meeting, but a first rate cut of 0.5% is not currently being considered. Fidelity believes that uncertainty surrounding the Fed's monetary policy this year has greatly decreased, and policy trends in 2025 will be dependent on the results of the US elections and the future development of trade and fiscal policies. In terms of macroeconomics, Fidelity believes that the probability of a soft landing (low growth and low inflation) in the US economy is increasing. In response to the Fed joining the rate cut camp, loose financial conditions should not pose a risk of recession, therefore maintaining a positive view of risk assets. However, consideration should be given to the escalation of geopolitical risks and uncertainty in the US elections. A positive outlook is maintained for stock investments, with a wait-and-see approach recommended for credit bonds; it is suggested to allocate global high-quality dividend strategies with US dollar high-quality bonds as the main core asset against market volatility; optimistic about Japanese stocks and technology stocks. Josephell Hong Kong's Chief Economist and Director of the Economic Research Department, Xue Junsheng, stated that recent US data indicates that local inflation is still on a downward trend, economic growth is slightly lower than last year, and the labor market is also slightly weakening. If future data reflects these conditions remain unchanged, the Fed may cut rates by 25 basis points in September, and then consider further rate cuts in November or December. Xue Junsheng stated that the Fed is expected to loosen monetary policy, which will further support the recovery of the Hong Kong economy. However, due to the limited cumulative rate cuts by the Fed this year, Hong Kong dollar interest rates may still remain at relatively high levels in the second half of the year, but as the number of rate cuts increases, Hong Kong dollar interest rates are expected to further decline next year. Jeff Klingelhofer, Co-Chief Investment Officer and Managing Director of Shenbo Investment, believes that the Fed wisely did not indicate a rate cut in September in its statement at this meeting, only stating the need to see continued improvement in inflation data, which appropriately maintains policy flexibility and avoids position reversals. The market assumes that a rate cut in September is a sure thing, but this is a misjudgment. The Fed certainly wants to cut rates, but before the September meeting, there are still two inflation data releases, and one data point that misses the mark could disrupt the rate cut plan. Klingelhofer emphasized that the changes in rates over the past few months are not directly related to entering a rate cut cycle. Inflation has slightly decreased, unemployment has slightly increased, and the rate market has responded accordingly. However, the Fed should avoid rushing to cut rates. Monetary policy should aim to ease the economic cycle rather than control it. Klingelhofer also mentioned that Powell reiterated at the press conference that the risks of inflation and unemployment have balanced out, but still subtly suggested that September is a reasonable baseline for a rate cut. He believes that the Fed will interpret the overall data as indicating a good economy, and based on this, the risks of hasty decisions seem greater than those of delayed decisions. He warns that investors should not only focus on the first rate cut, but on the frequency of rate cuts. As long as there is no recession, once the Fed starts cutting rates, it may still do so very slowly.