CICC Research reported that after China's National Day holiday in October, the interest rate cut expectations implied by the country's interest rate derivatives market rapidly strengthened, reaching levels seen before previous rounds of central bank rate cuts. As of October 16, China's 10-year and 30-year government bond yields fell to 1.65% and 2.06% respectively, both new lows for the year. The report suggests that one reason for the strengthening rate cut expectations is that the recent rapid decline in government bond yields has not triggered a tightening of liquidity by the central bank. CICC expects the central bank is more likely to achieve rate cuts by "re-anchoring" policy rates rather than a universal reduction in the 7-day reverse repurchase rate and LPR. This means maintaining the central funding rate at a lower level, which may limit further downside in government bond yields and is unlikely to affect existing loan rates, with only some new loan rates potentially declining.