Deep Tide TechFlow News, on December 19, CITIC Securities stated that the Federal Reserve is expected to lower interest rates by 25bps at its December 2024 meeting, in line with market expectations. The latest dot plot indicates that the target interest rate for next year is centered at 3.9%, higher than the 3.4% indicated in the September 2024 meeting, while also raising the inflation and economic growth forecasts for next year and lowering the unemployment rate forecast for next year.
Powell's remarks did not provide clear guidance on the 'magnitude and timing' of future rate cuts, but he expressed strong confidence in economic growth. From the SEP and Powell's statements, it is evident that the Federal Reserve has significant concerns about inflation next year; this monetary policy meeting was much more hawkish than the market generally anticipated. However, this aligns with our view that the Federal Reserve will cut rates twice in 2025. We maintain this view and expect that the Federal Reserve will most likely pause rate cuts at the next meeting to observe, and clearer guidance may not come until the March meeting. Volatility in the U.S. stock market is expected to increase. (Jinshi)
