Institutions: Market Prices in Fed Not Cutting Rates in January, Earliest Rate Cuts May Start in June

Odaily News According to a research report from Founder Securities, the December non-farm payroll data was mixed. The overall U.S. job market is in a mild downward trend, but the marginal improvement in the unemployment rate gives the Fed more reason to wait and see in January. Combined with the possibility that the Supreme Court may declare IEEPA tariffs unconstitutional, this could be short-term positive for U.S. stocks and the dollar, and negative for U.S. Treasuries: Data such as new job additions, job vacancy rates, and hourly wage growth indicate that the U.S. job market remained relatively weak in December, but the marginal decline in the unemployment rate was one of the few bright spots. Judging from interest rate futures and U.S. Treasury movements, after the data release, the market is pricing in no Fed rate cut in January, with the earliest possible rate cuts starting in June. At the same time, as the Supreme Court may soon declare IEEPA tariffs unconstitutional, it suggests that economic expectations may improve marginally, inflation pressures may weaken, but fiscal deficits may worsen. Under the combination of the Fed not rushing to cut rates and cooling tariffs, short-term U.S. Treasuries face more unfavorable factors and are likely to remain at high levels. U.S. stocks benefit from AI sector strength + reduced tariff disruptions, especially sectors heavily impacted by tariffs like consumer staples and industrials, which show greater resilience. (Jin10)