China Merchants Bank International: The Federal Reserve is likely to maintain a neutral and wait-and-see policy stance in the short term and may continue to pause interest rate cuts
Zhao Yin International released a research report stating that after the data was published, the yield on the 10-year U.S. Treasury bond slightly decreased by 4 basis points. The market's expectations for interest rate cuts in 2025 were slightly adjusted downwards, while expectations for cuts in 2026 were increased. Powell stated in a recent speech that uncertainty has significantly increased, but the economy remains in a good position, and the Federal Reserve does not need to act hastily, needing to observe the impact of White House tariffs and other policies. The bank expects that the Federal Reserve is likely to maintain a neutral and wait-and-see policy stance in the short term, as a dovish stance may increase the risk of stagflation due to the possibility of Trump imposing additional tariffs, while a hawkish stance would further exacerbate market volatility. The Federal Reserve may continue to pause interest rate cuts in March, May, and June. As Trump's policies lead to a noticeable economic slowdown, the Federal Reserve may cut rates once in September or December. The report indicated that the U.S. added 151,000 non-farm jobs in February, slightly below market expectations, with a slight rebound overall compared to the previous month. Private sector job growth rebounded significantly, but federal government employment decreased, with the impact of DOGE becoming apparent. Hourly wage growth on a monthly basis declined again, with wage growth maintaining a moderate slowdown, which is beneficial for reducing core service inflation. The unemployment rate rose by 0.1 percentage points to 4.1%, and the broad unemployment rate U6 increased significantly, with a substantial decrease in the employed population under the household survey measure
According to the Zhitong Finance APP, CMB International released a research report stating that after the data was published, the yield on the US 10-year Treasury bond slightly decreased by 4 basis points. The market's expectations for interest rate cuts in 2025 were slightly adjusted downwards, while expectations for cuts in 2026 were increased. In a recent speech, Jerome Powell indicated that uncertainty has significantly increased, but the economy remains in a good position, and the Federal Reserve does not need to rush into action, needing to observe the impact of White House tariffs and other policies.
The bank expects that the Federal Reserve is likely to maintain a neutral and wait-and-see policy stance in the short term, as a dovish stance may increase the risk of stagflation due to the possibility of Trump imposing additional tariffs, while a hawkish stance would further exacerbate market volatility. The Federal Reserve may continue to pause interest rate cuts in March, May, and June. As Trump's policies lead to a noticeable economic slowdown, the Federal Reserve may cut rates once in September or December.
The report indicated that the US added 151,000 non-farm jobs in February, slightly below market expectations, with a slight rebound overall compared to the previous month. Private sector job growth rebounded significantly, but federal government employment decreased, with the impact of DOGE becoming apparent. Hourly wage growth on a monthly basis declined again, and wage growth remained moderately slow, which is beneficial for a decrease in core services inflation. The unemployment rate rose by 0.1 percentage points to 4.1%, and the broader U6 unemployment rate increased significantly, with a substantial reduction in the employed population according to household survey standards