CICC: The U.S. economy is heading towards a soft landing, the Federal Reserve does not need to significantly cut interest rates for now

The CICC research report states that the actual GDP of the United States in the third quarter of 2024 grew by an annualized rate of 2.8% quarter-on-quarter, slightly lower than the market's expected 3.0%, and also a slight drop from the second quarter's 3.0%. However, it is still an impressive performance. Looking at individual items, personal consumption expenditure was strong, corporate equipment investment expanded, exports and government spending accelerated, indicating that US economic growth remains healthy. The relatively weak areas are real estate investment and construction investment, showing that high interest rates are still having a suppressive effect.

In addition, inflation fell further in the third quarter, implying that the U.S economy is heading towards a soft landing. We believe that there is no need for significant rate cuts by Federal Reserve for now; we expect a cut of 25 basis points next week with whether to skip cutting rates in December depending on how inflation progresses.