CICC: The US economy is heading for a soft landing, and the Fed does not need to cut interest rates significantly for the time being

According to the report, a research report by China International Capital Corporation (CICC) stated that the actual GDP growth rate in the US in the third quarter of 2024 was 2.8% on a quarter-over-quarter annualized basis, slightly lower than the market expectation of 3.0%, and also slightly lower than the 3.0% in the second quarter, but still a strong performance. Specifically, personal consumption expenditure was robust, corporate equipment investment expanded, exports and government spending accelerated, indicating that the US economy is still growing healthily. Relatively weak areas were real estate investment and construction investment, indicating that high interest rates are still having a suppressive effect. In addition, inflation further declined in the third quarter, suggesting that the US economy is heading towards a soft landing. We believe that the Federal Reserve does not need to cut interest rates significantly, and we expect a 25-basis-point rate cut next week, with whether to skip a rate cut in December depending on the progress of inflation.