Fed's Potential Rate Cuts Hinge on Oil Prices and Trump, Report Says

A report from China International Capital Corporation (CICC) suggests that the U.S. Federal Reserve should ideally cut interest rates twice, according to Jin10. This optimistic outlook is based on the assumption that inflation will decrease due to a high base effect, provided oil prices do not remain above $100 until the end of the year. However, the report notes that actual implementation depends on both oil prices and U.S. President Donald Trump's actions. The ongoing tension in Iran, which keeps oil prices high, and Federal Reserve Chair Jerome Powell's cautious stance due to an investigation, are challenges that Kevin Warsh, who is set to take over in June, cannot resolve alone. The report emphasizes that a swift compromise by Trump and a resolution to the investigation into Powell could pave the way for potential rate cuts.