Mingsheng Macro: The Federal Reserve (FED) does not have a strong subjective willingness to cut interest rates in June.

On May 8, the macro team of Minsheng Securities reported that why do we believe that the Fed's subjective willingness to cut interest rates in June is not strong? One is that the Fed's current data-based policy framework is "lagging behind," and the biggest problem before the June meeting is the inability to get enough data to give the Fed the courage to take action. Ahead of the June 18-19 meeting, the Fed will only be able to see the CPI and PPI for May, and the previous data has given insufficient confidence in the reasons for easing. Second, the timing of the June interest rate meeting was very "unfortunate". The White House deadline for setting a 90-day tariff moratorium is July 8, the deadline for the planned passage of the new tax cuts and spending bill is July 4, and the Fed meeting is June 18-19. Ahead of these two policy milestones, a forward-looking interest rate cut would mean taking a lot of risk – if tariff negotiations and tax cuts go well, the Fed will have every reason to "slow down" its easing.