ICBC International Chief Economist Cheng Shi: Whether the Federal Reserve needs to raise interest rates further will depend on inflation transmission and the actual evolution of the labor market.

ICBC International Chief Economist Cheng Shi stated that this rate hike is more akin to a preventive adjustment targeting inflation persistence and its spillover risks, reflecting that the Federal Reserve's policy focus, against the backdrop of an economy and job market that remain resilient, has shifted further toward guarding against inflation persistence and the risk of expectations becoming unanchored. Whether the Federal Reserve needs to raise rates further will still depend on the actual evolution of inflation pass-through and the labor market.