According to Jinshi, CICC's research report pointed out that small businesses in the United States have a significant impact on employment, but they are not highly concerned. The repeatedly postponed interest rate cut cycle may be suppressing the operation of small businesses and thus cooling the job market. Federal Reserve Board member Waller said in a speech on May 22 that "if the data in the next three to five months continues to be weak, the Fed may consider cutting interest rates at the end of 2024."
The research report believes that the operating difficulties of small businesses may be an important factor that leads to the marginal weakness of economic data, which in turn triggers interest rate cuts. However, when the endogenous momentum of the economy is still strong, the interest rate cut will be more likely to be a "shallow interest rate cut", showing the characteristics of prudent fine-tuning, gradual and preventive, and the boost to terminal demand and thus corporate profits will likely be greater than the boost to asset valuations.
