Barclays Bank stated that one of the factors that may keep U.S. interest rates high is U.S. (inflation) policy. At the December meeting, some FOMC participants clearly began to reflect expectations regarding tariffs in their inflation forecasts. Moreover, even among those who did not adjust their official forecasts, many now believe that the balance of inflation risks tends to be upward. Although Powell did not explicitly answer to what extent the Federal Reserve tends to view rising price levels related to tariffs, we believe that continuing to cut rates will be a challenge, especially in the context of rising inflation rates in recent years, given that tariffs are expected to exacerbate inflation in the second half of 2025. We expect the Federal Reserve to pause rate cuts after June next year and to resume rate cuts around mid-2026, after the inflationary pressures caused by tariffs dissipate. In our baseline, we expect two 25 basis point cuts in 2026, with a terminal rate of 3.25-3.50%.