CICC: If Tariffs Are Further Downgraded, the Federal Reserve May Consider Cutting Interest Rates

According to ChainCatcher, as reported by Jinshi, a research report from CICC states that if tariffs are further downgraded, the Federal Reserve may have the opportunity to cut interest rates. The current growth pressure has not manifested, with April's non-farm payrolls still strong and ISM manufacturing and services PMI maintaining resilience. Even if the Federal Reserve wants to react preemptively, there is no sufficient reason, especially considering Powell's term ends in May next year, which poses a significant risk for premature reactions. Therefore, in balancing the "dilemma" of inflation and growth, the Federal Reserve is more likely to choose to wait and see rather than act preemptively. However, if subsequent tariff risks can be further downgraded, the Federal Reserve may have the opportunity to cut interest rates in the third or fourth quarter to alleviate the growth pressure at that time.