TechFlow news, October 30 — According to Jinshi Data, a CICC research report stated that under "natural conditions," the current round of the Federal Reserve still has room for three more rate cuts, corresponding to long-term interest rates of 3.8–4.0%. Currently, the difference between U.S. real interest rates and the natural rate stands at 0.8%; cutting rates three more times by 25 basis points each would balance financing costs with investment returns, aligning with a nominal neutral rate of 3.5%. Assuming a term premium of 30–50 basis points, this translates into a 10-year U.S. Treasury yield of 3.8–4.0%. In the short term, the pace of rate cuts will depend more on government shutdowns and data releases—such as when the government shutdown ends and new employment data becomes available—while future paths will also be influenced by inflation trends. In comparison, the new Fed chair and the Fed's independence represent the biggest uncertainties for next year’s rate-cut path, potentially increasing policy uncertainty beyond the second quarter of 2026.
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