Lates News

Shenwan Hongyuan released a research report stating that there is a large divergence in the market's expectations for a rate cut by the Federal Reserve in the face of tariff-induced stagflation risks. The US economy faces the risk of "stagflation turning into recession" under the impact of tariffs, and financial pressures may become a core variable for the Fed's policy shift. With the current contraction in manufacturing PMI, accumulation of risks in commercial real estate debt, and increasing volatility in the US stock market, the Fed may be forced to start cutting rates in the third quarter of 2025. The bank predicts that if the financial stress index surpasses the threshold, the rate cut for the whole year may reach 75-100bps, and advises paying attention to opportunities for downward movement in US bond yields and strategic allocation windows for the Nasdaq.