CITIC SEC: Powell may lower interest rates by 25 basis points once in the second half of the year after taking over as chairman of the Federal Reserve.

CITIC SEC released a research report stating that in March 2026, the increase in non-farm employment in the United States was higher than expected, with the unemployment rate lower than expected, decreasing to 4.3%. The decline in employment in February was due to factors such as strikes in the healthcare industry, weather, and model adjustments. The rebound in employment in March reflected the dissipation of these factors, leading to significant fluctuations in the data over the past two months. The labor force participation rate further declined, causing the unemployment rate to fall. Due to population benchmark adjustments, the labor force participation rate for individuals aged 55 and above has significantly decreased since January, while the rate for individuals aged 25-54 has remained high. The non-farm report for March had no significant impact on the Federal Reserve's monetary policy path, maintaining the previous view that the Fed is likely to maintain interest rates at the current level in response to the recent rise in oil prices due to the Middle East conflict, and may even cut rates once by 25 basis points in the second half of the year under Chair Powell's leadership. Key Points: In March 2026, non-farm employment in the United States increased by 178,000 (expected increase of 65,000, revised downward by 133,000 from the previous value); the unemployment rate was 4.3% (expected 4.4%, previous value 4.4%); year-on-year wage growth was 3.5% (expected 3.7%, previous value 3.8%); and the labor force participation rate was 61.9% (expected 62%, previous value 62%). CITIC SEC's main points are as follows: Non-farm employment in the United States in March 2026 was higher than expected, with a significant rebound in the healthcare sector, which remained a major contributor. In March 2026, the private sector added 186,000 jobs, higher than the expected 78,000 and revised downward by 129,000 from the previous value. By sector, the manufacturing sector added 43,000 jobs, including 15,000 in durable goods and no change in nondurable goods. The service industry added 143,000 jobs, with healthcare and social assistance services adding 91,000 jobs (healthcare and social assistance services adding 89,900 jobs), leisure and hospitality adding 44,000 jobs, and transportation and warehousing adding 21,000 jobs, making them the main contributors to private sector employment. The government sector reduced...