Zhongjin: A US bond yield of about 4% can reach a balance, corresponding to a 100-125 BP rate cut by the Federal Reserve

On June 19th, Jinshi data reported that CICC research report stated that we believe that the purpose of this round of Fed interest rate cuts is to return interest rates to a neutral level, rather than because of economic recession. Based on this idea, we only need to calculate the degree to which financing costs need to be reduced to the return on investment, and then calculate the 10-year US Treasury bond points through the relationship between financing costs and long-term bond interest rates, and finally make the interest rate differential positive to infer the magnitude of the Fed's interest rate cut. We estimate that a 4% US bond can reach equilibrium, corresponding to a rate cut of 100 to 125 basis points.