Pulitzer: Expects the Fed to cut rates 1-2 times this year, inflation may remain high

According to the Zhītōng Finance and Economics APP, Ken Orchard, the head of fixed income at Pǔlàishì International and manager of the diversified income bond strategy fund, believes that inflation will not drop to a level that would prompt central banks to cut interest rates next year. The Federal Reserve may only cut interest rates once or twice this year. Inflation may remain high, and interest rates and Treasury bond yields may continue to rise. Therefore, Pǔlàishì maintains a relatively short duration to reduce interest rate risk. Ken Orchard stated that the trend of strong economic growth in the United States has paused since the beginning of the year. Although the growth gap between the United States and other economies has narrowed, Pǔlàishì believes that the gap may widen again next year. As economic growth diverges once again, Pǔlàishì expects monetary policy differences between the United States and other major developed markets (such as Europe and the UK) to also diverge. For example, while inflation remains relatively high, the European Central Bank is more willing to cut interest rates first. He further mentioned that the most significant differences in monetary policy will involve the United States and regions like Asia. For instance, the Bank of Japan has already started raising interest rates and is expected to continue doing so next year and possibly beyond. Therefore, it is crucial to consider the expectations reflected in the market and the actual outcomes when assessing the impact on interest rate markets. The market has already priced in multiple interest rate cuts by Europe, the United States, and other developed countries. Ken Orchard believes that the biggest economic concern is that growth accelerates too quickly, forcing central banks to respond. Investors may even need to seriously consider the possibility of central bank rate hikes, which could pose a challenge for the market. Additionally, market volatility has been low recently, and investor sentiment is leaning towards optimism. However, unexpected events could cause market fluctuations. He suggests that investors need to be prepared, such as by flexibly managing allocations to higher-risk fixed income assets