Zhongjin: Postpones forecast of Fed rate cut to the fourth quarter.

A report from CITIC Securities stated that after the US-Japan negotiations in Geneva, both sides significantly reduced tariffs, reducing the risk of a recession in the US economy. However, the effective tax rate of 15.5% is still significantly higher than last year's 2.4%, and inflation risks have not been completely alleviated. Historical experience shows that price increases generally occur 2-3 months after tariffs are fully implemented, and the latest inflation data does not yet reflect this. We believe that the easing of tariffs will reduce the Fed's concerns about employment, leading them to pay more attention to inflation risks, which means the Fed may continue to wait for clearer inflation data. We are postponing our prediction of the timing of the Fed's rate cut to the fourth quarter, and we expect that the rate cut within the year will be less than 50 basis points.