China International Capital Corporation (CICC) researchers shared their thoughts on the Fed’s interest rate cycle.
A recent study by China International Capital Corporation (CICC) highlights that the current cycle of the US Federal Reserve (FED) is fundamentally unfavorable an early interest rate cut.
Research shows that US economic growth is less likely to face a sudden, deep recession, At the same time, an early deterioration in financial conditions could spark growing demand for real estate.
However, according to researchers, the Fed’s policy change could accelerate the timing of the first interest rate cut, originally scheduled for < a i=1>second half of 2024.
The Fed could choose a “hedging” strategy, consistent with its approach in 1995 and 2019. This could include pausing to observe the impact of the first rate cut rather than making one. There are consecutive interest rate cuts.
In the interest rate decision announced last Wednesday, the FED wanted to keep interest rates unchanged and predicted 3 interest rate cuts separate 75 basis points in 2024. However, the market is focusing on further interest rate cuts.
The next Fed meeting will be held on January 30-31, 2024.