CITIC Securities: Still expects the Federal Reserve to cut interest rates no more than twice this year

CITIC Securities' research report states that the Federal Reserve's May 2025 FOMC meeting maintained the policy rate unchanged, with the meeting statement emphasizing that "uncertainty has further intensified." Powell's speech revolved entirely around the words "uncertainty" and "wait and see," seemingly providing almost no incremental information. However, based on our analysis framework of "transitory inflation + weaker growth + high uncertainty," the current U.S. economic data and inflation expectations have correspondingly reduced the expectation of rate cuts. We still anticipate that the Federal Reserve will cut rates no more than twice within the year and expect the June FOMC meeting to maintain the policy rate unchanged. On the market side, the uneventful meeting did not stir much, and we expect the market to continue trading around Trump's tariff policies in the short term. Bearish sentiment on the dollar remains strong in the forex market, the outlook for U.S. stocks is still unclear, and we expect high volatility to persist in the short term.