CICC: The Federal Reserve is still likely to cut interest rates in March

CICC's research report shows that the month-on-month increase in the US core CPI in December slowed from 0.3% last month to 0.2%, and from 3.3% to 3.2% year-on-year, both lower than market expectations. The non-rental service inflation (supercore), which the Federal Reserve is most concerned about, has fallen, and core commodity and rental inflation has remained mild, with no signs of re-acceleration. Despite strong non-farm payrolls last Friday, inflation continued to slow, indicating that the economy has not shown signs of overheating. This is good news. U.S. Treasury yields fell and U.S. stocks rebounded. Maintaining the previous judgment that the United States is expected to achieve a "Goldilocks" economy, the market may have overestimated the upside risks of U.S. inflation. The Federal Reserve is likely to skip the interest rate cut in January, and there is still a possibility of a rate cut in March. Maintain the view that there may still be two interest rate cuts in the first half of the year. (Jinshi)