CICC: The Federal Reserve remains on hold, and the timing of interest rate cuts may be delayed

CICC Research believes that the Federal Reserve's decision to maintain interest rates at the January meeting aligns with market expectations. Governor Waller cast a dissenting vote, possibly related to his desire to be nominated as the next Federal Reserve Chair. The monetary policy statement indicated that "the unemployment rate has stabilized," and Powell stated that monetary policy is "in a suitable position," suggesting that the threshold for another rate cut in the short term has increased. CICC anticipates that the Federal Reserve may still cut rates twice in 2026, but the first rate cut may be delayed until the second quarter. The core issue of the U.S. economy is not insufficient growth, but rather the imbalance in income distribution and the affordability pressure on ordinary households. Such structural problems cannot be solved solely through monetary policy and may instead prompt the government to adopt more non-market intervention policies in response to voter concerns