Institution: The Federal Reserve's January rate cut threshold remains high, with room to pause rate cuts

PANews January 11 News, according to Jintiao reports, Guotai Haitong research report states that the US labor market in December continues to show low hiring and low layoffs. On one hand, the unemployment rate unexpectedly fell to 4.4%, interrupting the ongoing upward trend; on the other hand, new employment still shows a slowdown, and subsequent annual revisions may further downward adjust. Since the December unemployment rate has not further increased and many employment indicators show that the risk of US employment market slowdown remains low, based on three consecutive rate cuts, the Federal Reserve may still have room to pause rate cuts. According to CME data, after the non-farm payroll data was released, the market expects only a 5% probability of a rate cut in January. The market still expects the Federal Reserve to cut rates twice in 2026, but the timing has been pushed back to June and September 2026. Events that could trigger increased expectations for future rate cuts mainly include the appointment and statements of the new Federal Reserve Chair.

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