CITIC Securities Expects Fed Rate Cut Amid Easing Iran Conflict

CITIC Securities released a report on April 14, indicating that market pricing for liquidity tightening may weaken. According to Jin10, CITIC Securities still anticipates a 25 basis point rate cut by the Federal Reserve in the second half of this year, which is more dovish than the market consensus. As the conflict in Iran enters a de-escalation phase, there may be room for U.S. stock valuations to recover. However, the future outlook remains uncertain, with attention needed on the impact of shipping disruptions in the Strait of Hormuz on global supply chains and demand. Currently, the resilience of the U.S. economic fundamentals may support real yields on U.S. Treasuries, making it difficult for long-term Treasury yields to decline significantly. Gold prices might have a chance for a liquidity-driven rebound, while the U.S. dollar could experience weak fluctuations as market sentiment improves.