Zhongjin: If tariffs are further reduced, the Federal Reserve may be expected to cut interest rates.

According to the Zhongjin Research Report, if tariffs are further reduced, the Federal Reserve may be able to cut interest rates. The current growth pressure has not been reflected, with strong April non-farm payrolls, and ISM manufacturing and service PMIs remaining resilient. Even if the Federal Reserve wants a preemptive response, there is not enough reason to do so, especially considering that Powell's term ends in May next year, and the risk of being ahead of the curve is also significant. Therefore, in the "dilemma" of balancing inflation and growth, the Federal Reserve is more likely to choose to wait and see rather than "act preemptively." However, if the subsequent tariff risks can be further reduced, the Federal Reserve may have the opportunity to cut interest rates in the third and fourth quarters to alleviate the growth pressure at that time.