The CICC Research Report pointed out that we believe that there is a high probability that May will be the last time to raise interest rates, unless there is an unexpected supply shock that leads to a surge in inflation risks.
On the one hand, the bank risks that continued to escalate during the May 1st period indicate that the pressure of tight money on the financial system is becoming more and more obvious. On the other hand, the effect of tight credit that may be caused by this will gradually appear, and then play a role in curbing growth and inflation.
For the interest rate cut that the market is more looking forward to, we believe that there are still variables. If the current financial risks subside temporarily, given the path of inflation’s next fall, it may not be realistic to expect an excessive rate cut.
The re-exposure of short-term bank risks and the approaching risk of the debt ceiling will “reverse” loose expectations from the perspective of risk aversion, but we believe that as long as no systemic risks occur, such an “overdraft” expectation will face another withdrawal after the situation stabilizes risks of.