--- title: "Guotai Haitong: The combination of tariffs and geopolitical risks disrupts inflation expectations; the turning point for the Federal Reserve to cut interest rates still needs to be awaited" type: "News" locale: "zh-HK" url: "https://longbridge.com/zh-HK/news/279754236.md" description: "Guotai Haitong released a research report indicating that tariffs and geopolitical risks are affecting U.S. inflation expectations, leading to pressure on expectations for Federal Reserve interest rate cuts. In the short term, inflation is primarily influenced by tariffs and geopolitical risks, but these factors are expected to have a short-term impact, and expectations for rate cuts may warm up in the second half of the year. The Federal Reserve maintained interest rates at its latest meeting, emphasizing that its concern about inflation outweighs the risks of economic downturn, with an overall hawkish stance that may trigger market volatility" datetime: "2026-03-19T09:06:55.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/279754236.md) - [en](https://longbridge.com/en/news/279754236.md) - [zh-HK](https://longbridge.com/zh-HK/news/279754236.md) --- > 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/279754236.md) | [English](https://longbridge.com/en/news/279754236.md) # Guotai Haitong: The combination of tariffs and geopolitical risks disrupts inflation expectations; the turning point for the Federal Reserve to cut interest rates still needs to be awaited According to the Zhitong Finance APP, Guotai Haitong released a research report stating that tariffs and geopolitical risks continue to disrupt U.S. inflation expectations. The Federal Reserve's short-term concerns about "inflation" outweigh those about "stagnation," and suppressed expectations for interest rate cuts will lead to volatility in U.S. stocks and bonds. However, the needs of the midterm elections, weakening labor market conditions, and the potential for mid-term stabilization of tariffs and geopolitical risks may lead to a resurgence of interest rate cut expectations in the second half of the year, although the turning point still needs to be awaited. ## Guotai Haitong's main viewpoints are as follows: On March 18, 2026, Eastern Time, the Federal Reserve released its interest rate decision and economic projections (SEP), followed by Powell's routine press conference. From the interest rate decision, SEP, and Powell's statements, there are five marginal changes: **First**, the Federal Reserve's interest rate decision emphasizes that the impact of the Middle East situation remains unclear, and Powell pointed out that economic forecasts are difficult to provide. **Second**, the Federal Reserve's economic projections (SEP) have been comprehensively revised upward, along with inflation forecasts. **Third**, Powell does not acknowledge stagflation in the U.S. economy, stating that concerns about inflationary risks outweigh concerns about economic downturn risks. **Fourth**, the Federal Reserve maintained its current interest rate decision, keeping the median forecast for one rate cut this year, but most officials have lowered their expectations for the number of rate cuts and discussed the possibility of rate hikes, leaning overall towards a hawkish stance. **Fifth**, Powell reiterated the independence of the Federal Reserve, and it has not yet been decided whether he will continue to serve as a Federal Reserve governor. **Overall, the decision to maintain the current interest rate aligns with market expectations. The Federal Reserve's comprehensive upward revision of economic and inflation forecasts indicates that concerns about "inflation" are significantly greater than those about "stagnation," leading to further market volatility.** **Short-term inflationary expectations mainly stem from tariffs and geopolitical risks, which suppress expectations for interest rate cuts, but these effects are expected to be short-term. Expectations for interest rate cuts may warm up in the second half of the year.** First, the impact of tariffs is gradually becoming clear. Trump may reintroduce tariffs through Section 122, Section 301, Section 232, etc., but the overall magnitude will not see a significant increase. Moreover, the Federal Reserve believes that the impact of tariffs on inflation is one-time, and there is not much concern about the transmission of tariffs. Second, based on the needs of the midterm elections, Trump has ample incentive to quickly end the conflict with Iran. Third, the main indicators of the Federal Reserve's focus are employment, inflation, and medium- to long-term interest rates. The labor market continues to be weak, but short-term inflationary pressures hinder interest rate cuts. The weakness in the labor market requires further progress towards rate cuts; if tariffs and geopolitical risks stabilize subsequently, the alleviation of inflation expectations will provide conditions for rate cuts. Fourth, the change in the Federal Reserve chair may also have some impact. The Federal Reserve currently maintains its forecast of one rate cut for the year, and the U.S. federal funds futures market is experiencing significant short-term volatility due to sentiment, already beginning to predict no rate cuts, which may lead to a resurgence of rate cut expectations in the second half of the year. **It is expected that U.S. Treasury rates will fluctuate at high levels in the short term while waiting for the resurgence of rate cut expectations, and U.S. stocks will wait for the release of easing expectations after a short-term shock.** In the short term, due to inflation constraints, expectations for interest rate cuts by the Federal Reserve will continue to be suppressed, and U.S. Treasury yields may remain high and volatile. Subsequently, with the change in the Federal Reserve Chair, as well as the stabilization of tariffs and geopolitical risks, expectations for interest rate cuts may be reignited, and the central tendency of the 10-year U.S. Treasury yield is expected to decline slightly. After the preventive interest rate cuts stop, U.S. Treasury yields are likely to rise relatively. **U.S. stocks will continue to experience short-term volatility, but may still have support as easing expectations are released.** In the short term, high volatility in U.S. Treasury yields may have some impact on U.S. stocks from a valuation perspective, but as expectations for interest rate cuts rekindle, liquidity will be favorable, and U.S. stocks may still perform well. On one hand, further interest rate cuts by the Federal Reserve will further lower the risk-free rate, or discount rate, providing support for U.S. stocks on the denominator side; on the other hand, the support for the economy after interest rate cuts will also provide further support for corporate earnings on the numerator side, reversing the economic downturn and potentially initiating a recovery. In the short term, U.S. stocks will be influenced by geopolitical risks and liquidity, and volatility may persist, with an upward turning point still needing to be awaited. **Risk Warning** The geopolitical risks in the Middle East face high uncertainty in the short term; after the ruling on the legality of Trump's reciprocal tariffs, there may be risks of new tariffs ### 相關股票 - [Dow Jones Utility Average (.DJU.US)](https://longbridge.com/zh-HK/quote/.DJU.US.md) - [Dow Jones Industrial Average (.DJI.US)](https://longbridge.com/zh-HK/quote/.DJI.US.md) - [Guotai Haitong (601211.CN)](https://longbridge.com/zh-HK/quote/601211.CN.md) - [S&P 500 (.SPX.US)](https://longbridge.com/zh-HK/quote/.SPX.US.md) - [NASDAQ Composite Index (.IXIC.US)](https://longbridge.com/zh-HK/quote/.IXIC.US.md) - [Vanguard Long Term Bd (VCLT.US)](https://longbridge.com/zh-HK/quote/VCLT.US.md) - [iShares iBoxx Invt (LQD.US)](https://longbridge.com/zh-HK/quote/LQD.US.md) - [Hwabao WP CSI All Share Investment Banking & Brokerage ETF (512000.CN)](https://longbridge.com/zh-HK/quote/512000.CN.md) - [Vanguard Short Term Bd (VCSH.US)](https://longbridge.com/zh-HK/quote/VCSH.US.md) - [iShares Barclays Short Treasury (SHV.US)](https://longbridge.com/zh-HK/quote/SHV.US.md) - [iShares Barclays MBS Fixed Rate Bd (MBB.US)](https://longbridge.com/zh-HK/quote/MBB.US.md) - [Pengyang Chinabond 30-year Treasury Bond ETF (511090.CN)](https://longbridge.com/zh-HK/quote/511090.CN.md) - [iShares Core US Aggregate Bd (AGG.US)](https://longbridge.com/zh-HK/quote/AGG.US.md) - [iShares Trust iShares 1-5 Year Invest Grade Corp Bond ETF (IGSB.US)](https://longbridge.com/zh-HK/quote/IGSB.US.md) - [VG Financial (VFH.US)](https://longbridge.com/zh-HK/quote/VFH.US.md) - [iShares barclays 20+ Yr Treasury Bd (TLT.US)](https://longbridge.com/zh-HK/quote/TLT.US.md) - [Schwab 5-10 Year Corp Bond ETF (SCHI.US)](https://longbridge.com/zh-HK/quote/SCHI.US.md) - [E Fund CSI 300 Financials (ex Banks) ETF (512070.CN)](https://longbridge.com/zh-HK/quote/512070.CN.md) - [ISHRS Us Brokers & Sec Exchg (IAI.US)](https://longbridge.com/zh-HK/quote/IAI.US.md) - [Vanguard Intermediate Term Bd (VCIT.US)](https://longbridge.com/zh-HK/quote/VCIT.US.md) - [iShares 7-10 Year Treasury Bond ETF (IEF.US)](https://longbridge.com/zh-HK/quote/IEF.US.md) - [Fidelity MSCI Financials Index (FNCL.US)](https://longbridge.com/zh-HK/quote/FNCL.US.md) - [SPDR Intermed Term (SPIB.US)](https://longbridge.com/zh-HK/quote/SPIB.US.md) - [Financial Select Sector SPDR Fund (XLF.US)](https://longbridge.com/zh-HK/quote/XLF.US.md) - [Vanguard Total Bond Market ETF (BND.US)](https://longbridge.com/zh-HK/quote/BND.US.md) - [ISHRS Us Trsry Bd (GOVT.US)](https://longbridge.com/zh-HK/quote/GOVT.US.md) - [iShares Barclays 1-3 Yr Treasury (SHY.US)](https://longbridge.com/zh-HK/quote/SHY.US.md) - [SPDR Bloomberg 1-3 Month T-Bill ETF (BIL.US)](https://longbridge.com/zh-HK/quote/BIL.US.md) - [Yinhua CSI All Share Investment Banking & Brokerage ETF (159842.CN)](https://longbridge.com/zh-HK/quote/159842.CN.md) - [Guotai CSI All Share Investment Banking & Brokerage ETF (512880.CN)](https://longbridge.com/zh-HK/quote/512880.CN.md) ## 相關資訊與研究 - [LIVE MARKETS-Fed rate cut and hike are equally unlikely - BNP](https://longbridge.com/zh-HK/news/279819633.md) - [ROI-Kevin Warsh's first move as Fed chair could be a rate hike: McGeever](https://longbridge.com/zh-HK/news/279790237.md) - [BREAKINGVIEWS-Fed's new rulebook makes banks bigger, not better](https://longbridge.com/zh-HK/news/279830921.md) - [US-based StoneX proposes $320 million acquisition of London-listed CAB Payments](https://longbridge.com/zh-HK/news/279223819.md) - [Bank of America Executive Sells Shares](https://longbridge.com/zh-HK/news/279096295.md)