BOCOM INTL: The Fed's pace of rate cuts after may be slow and could still adjust the path of rate cuts.

BOCOM INTL released a research report stating that the Federal Reserve of the United States will cut the benchmark interest rate by 50 basis points to a range of 4.75-5%, which exceeded both the market's and the bank's previous expectations. The rate statement indicated that gaining confidence in inflation progress was the premise for initiating the rate cut. However, the uncertainty in employment and economic outlooks were key driving factors for the significant 50 basis points rate cut. Concerns about unexpected slowdown in the labor market and lack of confidence in achieving a soft landing for the US economy were the main reasons behind the Federal Reserve's aggressive preemptive rate cut. Nevertheless, the path for further rate cuts remains uncertain. On one hand, there is significant internal disagreement within the Federal Reserve, making it easy for the rate cut size and pace to fluctuate, increasing the difficulty of forecasting. On the other hand, Powell clearly stated that future rate cuts will still depend on data, suggesting that this round of rate cuts may rely more on data in an atypical manner, with the possibility of rebound in subsequent inflation especially in rent-related inflation. After the significant rate cut, the market's expectation for further rate cuts remains optimistic. With the US economy still showing resilience, sticky inflation, and the prospect of upside risks, the bank believes that there are still limitations to the rate cuts by the Federal Reserve. With the significant rate cut as a premise, the pace of further rate cuts may be gradual, and it is not ruled out that the Federal Reserve may pause and adjust its rate cut path.