Zhongjin: It is expected that the Federal Reserve will cut interest rates in March and June next year.

On December 19th, Jin10 Data reported that CICC Research believes that the hawkish guidance is for precautionary reasons, as the Fed does not want to make mistakes again on inflation issues. However, officials have not completely abandoned the idea of rate cuts, today's "hawkish" is for tomorrow's not "hawkish". The Fed's guidance is consistent with our forecast in the annual report, so we maintain our judgment that the Intrerest Rate policy in 2025 will be lowered to the neutral level of 3.75% -4.0%. In terms of the pace of rate cuts, we predict that the Fed will "skip" the January meeting next year, then cut interest rates by 25 basis points at the March and June meetings, and then stop cutting interest rates. In the second half of the year, it will enter a wait-and-see mode, and monetary policy will be decided based on the effect of Trump's governance. We do not believe that the Intrerest Rate guidance given by the Fed is excessively tight, nor have we seen any signs that monetary policy will break the prospect of a "soft landing". More uncertainty comes from Trump's policies, but that will have to wait until Trump takes office on January 20th to be revealed.