Institution: High tariffs may trigger a 'recessionary' interest rate cut by the Federal Reserve

According to BlockBeats news, on April 23rd, a research report by China International Capital Corporation (CICC) suggested that there are two scenarios to consider. One is the lack of substantial progress in negotiations between the United States and its trading partners. After 90 days, the effective tariff rate in the United States is still high. At this time, income effects dominate, and weak economic demand may prompt the Federal Reserve to start cutting interest rates from July, with a cumulative annual rate cut of up to 100 basis points. Another scenario is when negotiations yield results, tariffs are reduced, and demand shocks are relatively mild under the dominance of substitution effects, but inflationary pressures are more persistent. The Federal Reserve may delay its easing pace and only cut interest rates slightly once in December throughout the year. For the market, although monetary easing comes earlier in the first scenario, this' recessionary 'interest rate cut reflects the deterioration of economic fundamentals and instead suppresses risk assets. (Golden Ten)