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<p>CICC analyzes the Federal Reserve's first rate cut of 50 basis points, seeing it as the first rate cut since the 2020 pandemic, signaling the end of the tightening cycle. Despite growing concerns about future economic growth, US stocks, gold, and US bonds have shown strong performance after the rate cut. CICC expects two more rate cuts within the year, totaling 250 basis points, and emphasizes no signs of a recession. Investors are focusing on asset trading strategies</p>

- The Federal Reserve initiated a 50 basis points rate cut, marking the first cut since the 2020 pandemic and signaling the end of the current tightening cycle post the 2023 July halt. The unexpected magnitude of the cut raised market concerns, with assets like U.S. bonds, gold, dollar, and stocks initially rising but later retracting due to future paths and economic outlook.
- Despite limited incremental information on recession and rate cuts from various data pre-meeting, market expectations of a 50bp cut intensified, reflecting concerns about Fed policy lagging behind the curve. Powell emphasized no signs of recession, a cooling labor market, and ongoing inflation challenges.
- The unconventional 50bp cut and adjusted future rate expectations highlighted the Fed's cautious approach, aiming to address current job market conditions. Powell's emphasis on a significantly higher neutral rate post-pandemic indicated a balanced stance, with markets awaiting further economic data to gauge the Fed's "faster easing with solid growth" message.

CICC: Federal Reserve's "Unconventional" Rate Cut Kickoff