CICC: The Federal Reserve may stand still in January next year, with the next rate cut possibly in March.

On December 11, the latest research report from Zhongjin Securities pointed out that the Federal Reserve is expected to cut interest rates by 25 basis points at the December meeting, but the number of officials opposing the rate cut has increased to two, indicating that the threshold for further rate cuts is rising. At the same time, Powell's stance is not strong, and the Federal Reserve announced that it will start purchasing short-term Treasury securities, helping to ease market concerns. The previously fully priced-in expectation of a "hawkish rate cut" has reversed, exacerbating market volatility. Looking ahead, considering the downward pressure on the economy and employment, we expect the Federal Reserve to continue cutting interest rates in 2026; but given the persistence of inflation stickiness, the pace of rate cuts is expected to slow down. The Fed may stand pat in January, with the next rate cut possibly in March.