Fed Rate Cuts May Trigger Stagflation Risk, Creating a Dilemma for Policymakers

According to ChainCatcher, citing a report from Golden Ten Data, Minsheng Macro Research states that a Federal Reserve rate cut is the beginning of the issue, not the end. An increase in the rate cut magnitude could trigger inflation risks, while insufficient rate cuts may bring political risks. The dot plot suggests a 75 basis point rate cut within the year, an increase of 25 basis points compared to June. In the future, factors such as a cooling labor market and sticky inflation will make the Federal Reserve's decision-making more complex, and the market may price in more rate cuts.