ZhaoYin International: The Federal Reserve may further cut interest rates twice next year, with the target for the federal funds rate at 3.25%-3.5% by the end of next year
Zhaoyin International released a research report stating that the year-on-year growth rate of the U.S. CPI in September continued to rise slightly, but was below market expectations. The core CPI showed a month-on-month slowdown, with the surge and subsequent drop in used car prices driving down the month-on-month increase in core goods. However, prices of goods with a high import ratio rebounded significantly, indicating that the tariff effects are still being released. The rebound in inflation was lower than expected, and the Federal Reserve will pay more attention to employment risks, expecting to cut interest rates once more in October or December, with the year-end target for the federal funds rate lowered to 3.75%-4%. The bank stated that the CPI for October is very likely to stop being published, and based on the experience from 2013, the first CPI data after a long suspension may show significant deviations due to the limited sample data collection, increasing the uncertainty of the interest rate cut timing. As the reserves in the banking system approach a reasonably ample level, the Federal Reserve may soon stop QT9. Next year, as economic growth stabilizes and inflation declines, the Federal Reserve may further cut interest rates twice, with the year-end target for the federal funds rate lowered to 3.25%-3.5%
According to the Zhitong Finance APP, CMB International released a research report stating that the year-on-year growth rate of the U.S. CPI in September continued to rise slightly but was below market expectations. The core CPI showed a month-on-month slowdown, with the surge and subsequent drop in used car prices leading to a decline in the month-on-month increase of core goods. However, prices of goods with a high proportion of imports rebounded significantly, indicating that the effects of tariffs are still being released. The rebound in inflation was lower than expected, and the Federal Reserve will pay more attention to employment risks, with expectations of another rate cut in October or December, bringing the year-end federal funds rate target down to 3.75%-4%.
The bank stated that the CPI for October is likely to stop being published, and based on experiences from 2013, the first CPI data after a long suspension may show significant deviations due to limited sample data collection, increasing uncertainty regarding the timing of rate cuts. As the reserves in the banking system approach a reasonably ample level, the Federal Reserve may soon stop QT9. Next year, as economic growth stabilizes and inflation declines, the Federal Reserve may further cut rates twice, bringing the year-end federal funds rate target down to 3.25%-3.5%
