Zhengfang Securities: Market Prices No Fed Rate Cut in January, Earliest Rate Cut Could Begin in June

On January 10th, according to Golden Ten Data reports, Zhengfang Securities research report stated that December non-farm data showed mixed results. The U.S. employment market overall is in a moderate downward trend, but the unemployment rate showed marginal improvement, giving the Federal Reserve more reasons to adopt a wait-and-see approach in January.

Combined with the possibility that the Supreme Court may declare IEEPA tariffs unconstitutional, which could be bullish for U.S. stocks and the U.S. dollar in the short term while bearish for U.S. Treasuries: data on new job additions, job vacancy rates, and wage growth rates all indicate that the U.S. employment market in December remains relatively weak, but the marginal decline in unemployment rate data is among the few bright spots.

From the perspective of interest rate futures and U.S. Treasury trends, the market is pricing in no rate cut from the Federal Reserve in January, with the earliest possible rate cut possibly beginning in June. Meanwhile, since the Supreme Court may recently declare IEEPA tariffs unconstitutional, this means economic expectations could marginally improve, inflation pressure could weaken, but fiscal deficits could worsen. With the combination of the Federal Reserve not being in a rush to cut rates and tariff cooling, U.S. Treasuries face more unfavorable factors in the short term with a high probability of trading at elevated levels. U.S. stocks benefit from AI prosperity and reduced tariff disruptions, particularly in sectors damaged by tariffs such as consumer staples and industrials, which show greater elasticity.