Recently, the content of the regular meeting of the Monetary Policy Committee of the People's Bank of China in the third quarter of 2025 was announced. As an important weather vane for judging the direction of monetary policy in the coming period, this meeting released a series of key policy signals.

When studying and judging the economic and financial situation at home and abroad, the meeting believed that the current external environment is becoming more complex and severe, the momentum of world economic growth has weakened, trade barriers have increased, the economic performance of major economies has been differentiated, and there is uncertainty about inflation trends and monetary policy adjustments.

What changes have been made to the policy, and what information has been revealed? Jingtai interprets it for you.

Prices have shown signs of stabilization, and the policy no longer emphasizes "continued downturn"

Compared with the second quarter, the central bank's description of prices at its latest meeting has changed: from "prices continue to run at low levels" to "prices run at low levels", and the word "continued" is missing. This suggests that prices may be showing some signs of improvement.

The latest data also confirms this, the industrial product price (PPI) in August did not fall month-on-month (compared to the previous month) and turned flat, ending the previous eight-month decline, down 2.9% year-on-year (compared to last year), but the decline narrowed by 0.7 percentage points from July, the first time since March this year. Although overall prices are still low, the decline is slowing down, and prices in some areas have begun to stabilize and rebound.

What is the next step in monetary policy?

The meeting proposed to strengthen monetary policy regulation and control, improve the flexibility of prediction and response, grasp the strength and rhythm of policies, implement the measures that have been introduced, and let the policies really play a role.

It also emphasizes that we will continue to implement moderately loose monetary policy, strengthen "counter-cyclical adjustment" (that is, provide more support when the economy is weak), give full play to the functions of monetary policy in "overall water release" and "precise support", strengthen the cooperation between monetary and fiscal policies, and jointly stabilize economic growth and price levels.

The focus of the policy has shifted from "making new moves" to "implementing existing policies"

The central bank meeting also emphasized that the "internal circulation" of the domestic economy should be placed in a more prominent position and the relationship between "production" and "demand" should be coordinated. Strengthen the coordination and cooperation of various policies, achieve policy stability and no tossing, and at the same time flexibly respond to new changes, and further consolidate the good momentum of economic recovery by expanding domestic demand, stabilizing confidence, and stimulating vitality.

Compared with the last meeting, what has changed?

The statement of "afterburner to launch new policies" was deleted, and instead of emphasizing "new moves immediately", it was emphasized that policies should be stable and continuous, not over and over, and at the same time, they should be flexible, predictable, and adjusted in a timely manner according to the situation.

Judging from the economic data in August, the "stimulus policy" launched in the early stage is gaining momentum: manufacturing PMI (factory activity): 49.4%, rebounding, non-manufacturing index (services, construction, etc.): 50.3%, returning to the expansion range, and comprehensive PMI (overall economy): 50.5%, rebounding continuously.

All three indexes are above the boom and bust line of 50 or close to rebounding, indicating that China's economy as a whole is still expanding and the prosperity is improving.

What to do next?

Look at data and make decisions - that is, "data-based". This is not only what China does, but the Federal Reserve, the European Central Bank, the Bank of Japan and other major central banks around the world do this. How about economic data, how to adjust interest rates and policies.

Whether to restart treasury bond trading has become a major attraction affecting the market

Although the central bank's statement on "long-term Treasury yields" has not changed as before, the market is still paying attention to this issue and its views are changing.

The meeting mentioned that it is necessary to observe the operation of the bond market from the perspective of macro overall risks, and pay special attention to changes in long-term treasury bond yields. This is the seventh consecutive quarter that the central bank has said this, indicating that it has been staring at this indicator.

Treasury interest rates have risen, and recently, there have been several noticeable changes in the Treasury market: more and more bonds issued by the government (supply), and Treasury yields have risen significantly: the 10-year Treasury yield has exceeded 1.8%, and the 30-year Treasury yield has also risen by more than 2.1%. In contrast, interest rates were low at the beginning of the year.

The market is guessing: Will the central bank "buy treasury bonds"?

Many believe that now may be a good time for the central bank to resume buying and selling Treasury bonds. On September 3, the joint working group of the Ministry of Finance and the central bank held its second meeting to discuss: how to issue government bonds and how the central bank operates treasury bond trading. This has made everyone's expectations that "the central bank will enter the market to buy treasury bonds" are getting stronger and stronger.

Why was it suspended before? Is it possible to restart now? In January this year, the central bank announced the suspension of buying treasury bonds, because: at that time, the market's expectations of "loose money" were very strong, and everyone rushed to buy bonds, resulting in lower and lower interest rates, which was unreasonable, so the central bank suspended buying and waited for the market to balance.

Now the conditions are different: demand in the bond market is weaker than at the beginning of the year, interest rates have rebounded, and liquidity management in the banking system has become more difficult. These changes have made it more likely that the central bank will start buying and selling treasury bonds again.

Banks must be stable, and interest rates must be lowered

This central bank meeting is not only concerned about the economy, but also trying to balance two things: one is to support the development of the real economy to borrow money, and the other is to ensure that the bank itself is healthy and not "sick".

How to support the economy? Enough money and stable interest rates!

The meeting proposed to maintain sufficient market liquidity, that is, there should be enough money in the banking system, guide banks to increase lending, make it easier for enterprises to borrow money, and let the growth of total loans and money supply match the economic growth rate and price targets.

At the same time, it is also necessary to strengthen the central bank's guiding role in interest rates, improve the formation mechanism of market interest rates, make interest rates more truly reflect supply and demand, give full play to the supervisory role of the "market interest rate self-discipline mechanism", prevent banks from setting arbitrary prices, promote the overall financing cost to continue to decline, and make corporate and personal loans cheaper.

For the stock market, foreign exchange market, and property market, the policy tone remains unchanged.

Foreign exchange market: enhance the market's ability to resist risks, stabilize everyone's expectations for the RMB exchange rate, prevent exchange rate fluctuations, and keep the RMB exchange rate basically stable at a reasonable level.

Stock market: Continue to emphasize "maintaining the stability of the capital market", make good use of new tools, such as "swap facilitation" between securities, funds and insurance companies, support listed companies to repurchase shares and re-lending by major shareholders to increase their holdings, and explore turning these measures into a long-term system, no longer just "emergency".

Real estate market: continue to "stabilize the property market", do not stimulate or make a hard landing, implement the financial policies that have been introduced, accelerate the revitalization of unsellable houses and idle land, and reduce inventory.

The central bank's thinking this time is very clear: money should be released, banks should be stable, interest rates should be lowered, and at the same time, it should maintain a stable policy on the foreign exchange market, stock market, and property market. There is only one goal: to stabilize growth, expectations, and market.