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2025-09-18 09:52:48
[Zheshang Securities: Expectations of the Fed's "Risk-Management" Rate Cuts Still Face a Possible Backslide] The Zheshang Securities macroeconomic research team published a research report stating that the Federal Reserve will cut interest rates by 25 basis points this month as expected, and the dot plot predicts two consecutive rate cuts in the remaining two meetings this year. However, it is worth noting that Powell, in a post-meeting Q&A session with reporters, stated that the September rate cut was a "risk-management" one. The Zheshang Securities macroeconomic research team believes this was one of the most important statements from the meeting. Overall, while the dot plot suggests there is still room for two rate cuts this year, the Zheshang Securities macroeconomic research team believes that expectations of easing still face a potential backslide. This is primarily due to two factors: First, as the core driver of the US economy shifts from consumption to investment, the non-farm payrolls core may decline. However, a weak non-farm payrolls figure does not necessarily indicate a weak economy, and inflation may be more resilient than expected. Second, despite a decline in the non-farm payrolls core, the unemployment rate may not rise due to the shrinking labor force caused by illegal immigration. If the unemployment rate remains stable, further rate cuts may not materialize. Furthermore, it is important to note the possibility of a halt in balance sheet reduction this year.
