CICC: Fed rate cut pace may switch between "fast-slow-fast"

On October 10, according to the China Gold Research Report, our benchmark expectation is that the Fed's interest rate cut cycle may be divided into three stages: "fast-slow-fast": 2025Q4 is the first stage, with a faster pace of interest rate cuts, or 3-4 consecutive interest rate cuts. The first half of 2026 is the second stage, and the pace of interest rate cuts slows down. As inflation continues to rise, the Fed may need to rebalance the risks of downward growth and upward inflation, and cannot continue to cut interest rates rapidly. It may stop "balance sheet reduction" to appease financial marekt. The second half of the year is the third stage, and the pace of interest rate cuts has accelerated again. Due to the expiration of Powell's term in May 2026, we expect that the Trump administration is likely to nominate a more dovish Federal Reserve chairperson, and the inflationary effect of tariffs may come to an end, and the Federal Reserve may re-accelerate the pace of interest rate cuts. In summary, we believe that the Fed's easing in the coming year is the general trend. Loose trading is the main line of the global market, or it may promote the depreciation of the US dollar, which is generally beneficial to various assets such as Chinese and foreign stocks, bonds, and gold.