CICC: The road to rate cuts by the Fed is longer, next rate cut may be postponed until the fourth quarter.

The Zhongjin Research Report stated that the Federal Reserve's decision to maintain interest rates during the April meeting was in line with market expectations. However, four officials voted against it, with three of them opposing the inclusion of dovish language, indicating a more cautious monetary policy stance. The high oil prices triggered by the US-Iran conflict, combined with the previous tariff effects, have made the inflation environment more complex. Supply shocks have shifted from isolated incidents to a new norm, meaning that the scope for policy easing is being compressed and the threshold for interest rate cuts will be raised. This meeting is also the last interest rate meeting under the leadership of Powell at the Federal Reserve. Although his successor, Warsh, has signaled "balance sheet reduction and interest rate cuts", he may find it difficult to push for interest rate cuts in the short term due to the committee's collective decision-making mechanism. We believe that the possibility of a rate hike by the Federal Reserve this year is low, but the path to interest rate cuts will be longer, with the next rate cut possibly delayed until the fourth quarter.