The Federal Reserve Will Remain Cautious in Its Rate Cut Decisions and Is Unlikely to Implement Significant Cuts

According to ChainCatcher, citing Jintou reports, a research note from CICC points out that the market has recently priced in a significant increase in expectations for a Federal Reserve rate cut. However, there are divisions within the Fed, with some members supporting a rate cut while others advocate a wait-and-see approach. Despite pressure from Trump and Treasury Secretary Bessent, among others, to lower rates, CICC believes that current conditions do not support a substantial rate cut. The biggest risk facing the U.S. at present is "quasi-stagflation," which cannot be resolved by rate cuts. Monetary policy should focus on stabilizing inflation, and the Fed is expected to remain cautious in its rate cut decisions.