CICC: If tariffs are further downgraded, the Federal Reserve may be expected to cut interest rates

ChainCatcher news, according to Jinshi reports, the China International Capital Corporation research report states that if tariffs further downgrade, the Federal Reserve may be expected to cut interest rates. Current growth pressures are not reflected; April's non-farm payrolls remain strong, and the ISM manufacturing and services PMIs also maintain resilience. Even if the Federal Reserve wants to respond preemptively, there is not enough justification, especially considering that Powell's term ends in May next year, which poses a significant risk of premature response. Therefore, in balancing the "dilemma" of inflation and growth, the Federal Reserve is more likely to choose to wait and see rather than take "preemptive" action. However, if the subsequent tariff risks can further downgrade, the Federal Reserve may have the opportunity to cut interest rates in the third or fourth quarter to alleviate the growth pressures at that time.