CICC: Lowered the Fed's interest rate cut forecast to one

Sina Financial News CICC Research said that since the beginning of this year, the pace of inflation slowdown in the United States has slowed, the labor market is still strong, consumer spending is stable, and real estate and manufacturing have picked up. At the same time, financial conditions remained accommodative, corporate financing costs fell, and strong equity market performance supported the expansion of household sector wealth. From the perspective of economic fundamentals, it is believed that the urgency and necessity of the Fed to cut interest rates has decreased, and it may be difficult for the Fed to follow its guidance of three rate cuts this year, so we have lowered the forecast of the number of rate cuts to one, and the timing of the rate cut may be postponed to the fourth quarter. But this is an election year, and non-economic disruptions are difficult to predict, and the risk is that the Fed may cut interest rates sooner because of these factors. However, history has shown that doing so can easily trigger “secondary inflation” and complicate subsequent economic and policy developments.