Galaxy Securities: It is appropriate for the Federal Reserve to make 2 to 3 rate cuts totaling 50-75 basis points

The research report from Galaxy Securities states that considering the US consumption will not significantly slow down in the second half of 2024 under the support of wages and other incomes, investment is still suppressed by high interest rates, fiscal policy continues to expand to bolster the economy, and unemployment rate continues to rise overall. It would be appropriate for the Federal Reserve to cut interest rates 2-3 times, accumulating a total of 50-75 basis points. The actual economic impact difference between two or three rate cuts is limited. At the same time, there's no need for a single 50BP rate cut due to temporary economic resilience within this year; market expectations are still slightly optimistic. As the Fed shifts its focus towards labor markets while unemployment rates continue rising but short-term economic resilience remains intact, markets may continue with "rate-cut trading" as their main theme. Weakening labor data and investment data could intermittently lead to recession trades; short-term U.S Treasury yields and dollar index downtrends continue receiving support.