French Foreign Trade Bank: Still expects the Fed to restart rate cuts in September, with the terminal rate expected to reach 3%

The French Ministry of Foreign Trade Bank stated that the results of this Federal Reserve meeting completely align with the policymakers' previous guidance, therefore we have not changed our expectations for the Fed: we expect the rate cut cycle to restart in September and may continue to cut rates at multiple consecutive meetings until the terminal rate reaches 3%. Our baseline forecast for this year is that the unemployment rate will rise moderately rather than sharply. In this relatively benign scenario, the Fed will only ease policy once inflation risks have been eliminated. However, we need to be cautious about downside risks - if the potential fragility of the labor market erupts, the Fed may be forced to cut rates before September, and the magnitude may exceed our baseline forecast of 25 basis points.