Huatai Securities: Maintaining the baseline judgment that the Federal Reserve is highly likely to implement two preventive rate cuts in September to December.

According to Huatai Securities research report, the Federal Reserve will announce its decision on the June interest rate meeting in the early morning of June 19th. Although the Middle East geopolitical conflict has boosted oil prices, it is expected that the current impact on the Federal Reserve is limited. The Federal Reserve mainly focuses on the domestic employment market and inflation trends: the employment market is orderly cooling down, and the transmission of tariffs to inflation is not yet evident. Therefore, it is expected that the Federal Reserve will maintain the interest rate unchanged at the June meeting, while lowering the growth forecast for 2025 and raising the inflation forecast. Looking ahead, it is expected that Powell will emphasize that the future policy interest rate path depends on data. looking ahead, Huatai Securities maintains the basic judgment that the Federal Reserve is likely to implement two preventive rate cuts in September to December. However, if the data is stronger than expected or the fiscal bill is more relaxed than expected, the rate cut expectation may be withdrawn.