CITIC Securities: Maintains the judgment of two rate cuts by the Federal Reserve this year

ChainCatcher news, CITIC Securities research report points out that in January 2025, the number of new non-farm jobs in the United States was lower than expected, with healthcare services, retail, and government sectors being the main contributors. The wildfires in Los Angeles and the severe cold weather in other parts of the United States did not have a significant impact on the overall job market. The unemployment rate has decreased, wage growth has increased, and the annual revisions showed fewer downward adjustments than the preliminary revisions, indicating a healthy job market. It is expected that the Department of Government Efficiency (DOGE) led by Musk will have a minimal impact on new non-farm jobs in 2025.

The non-farm data broke the relatively optimistic sentiment in the market following the December CPI release, and expectations for interest rate cuts have been postponed again. The market's focus will now revolve around Trump's tariff haze and inflation expectations, with U.S. stocks expected to remain highly volatile. If the January CPI or tariff plans exceed expectations, U.S. Treasury yields and the dollar index may rise again. We maintain our judgment that the Federal Reserve will cut interest rates twice this year, each by 25bps.