A CICC research report suggests that US inflation and economic data may increase mid-2025, and interest rate cuts may stop. With Trump’s election, interest rate increases are more likely than decreases, and the cuts may reach 100bps or more. Inflation and economic data may pick up in mid-2025, causing interest rate cuts to end.
CICC predicts that inflation will decrease in the fourth quarter due to base effects, but with falling rent pressures, inflation and core inflation may remain low in Q1 2025. Cutting interest rates to 3.5% could be a reasonable level.
