ChainCatcher news, according to Flush, a CICC research report pointed out that the Federal Reserve kept the policy interest rate unchanged at the January meeting, in line with expectations. The monetary policy statement suggested that officials still lack confidence that inflation will return to the 2% target and therefore want to keep their options open rather than rush to cut interest rates in March. We believe that recent strong economic data and supply chain risks caused by Red Sea shipping disruptions are the main reasons for the Fed to be more cautious.

If economic fundamentals are still strong and supply risks have not been completely eliminated, the risk of renewed inflationary pressures cannot be ignored. Our baseline scenario is still that the Federal Reserve may cut interest rates in the second quarter, but the extent of the rate cuts throughout the year may not be as large as market forecasts.