CITIC Securities: U.S. Rate-Cut Speculation on Hold Pending Powell’s Jackson Hole Speech

Key PointsJuly CPI initially revived rate-cut trade memories from July 11, 2024.July PPI (released Aug. 14) exceeded expectations, denting the trade.Powell’s Jackson Hole speech could reset expectations for a September rate cut.Rate-cut sensitive sectors: Russell 2000, S&P 500 Real Estate, Nasdaq Biotech.According to Jinshi Data, a CITIC Securities research note said U.S. equity markets have put rate-cut speculation on pause, awaiting cues from Federal Reserve Chairman Jerome Powell’s remarks at the Jackson Hole Global Central Bank Annual Meeting.The firm highlighted that while July’s CPI rekindled memories of the July 11, 2024 rally in rate-sensitive assets, the stronger-than-expected July PPI print on Aug. 14 dampened sentiment.CITIC Securities believes if Powell adopts a dovish tone and signals a September rate cut, markets could see a renewed rally in the Russell 2000, S&P 500 Real Estate, and Nasdaq Biotech indices—mirroring moves seen during the July 2024 rate-cut trade.