Gold Finance reported that CICC research indicates that the Federal Reserve implemented a more aggressive 50-basis-point rate cut than anticipated, based on the interest rate decision. The monetary policy statement highlights that recent inflation data has instilled greater confidence among policymakers regarding achieving the 2% inflation target. The Fed's action suggests a shift in its response function, prioritizing employment over inflation. This signals a low tolerance for rising unemployment, with officials unwilling to risk jeopardizing the prospect of a soft landing.

Based on Powell's statement, we believe any unemployment rate exceeding 4.4% could trigger further rate cuts. This also suggests the Fed will maintain a dovish stance until the job market data stabilizes. Looking ahead, the Fed's more substantial rate reduction increases the likelihood of a soft landing in the short term.