Zhongjin: The resilience of the fundamentals is expected to push the 10-year U.S. Treasury Intrerest Rate up to 4.2%.

Jinshi data, August 15th, Zhongjin Research Report stated that looking ahead, we judge that the restraint of the US short-term Intrerest Rate on the economy has been realized, and it is not ruled out that economic data such as CPI will further weaken under the base effect and the economic marginal slowdown, thereby pushing the 10-year US Treasury Intrerest Rate to probe around 3.7%. We estimate that the US deficit in the third quarter of this year is about $631.7 billion, compared to $509.9 billion, $554.7 billion, and $208.5 billion in the previous three quarters. Under the condition of the US fiscal re-empowerment, we estimate that the resilience of the US economy itself may be re-invigorated, and the probability of a recession is low. Therefore, we believe that the start of rate cuts may become a turning point in the trend of Intrerest Rate, and after the rate cut, in the absence of a recession in the Benchmark, the resilience of the fundamentals is expected to push the 10-year Intrerest Rate up to 4.2%, presenting a steep bull (rate cut) in the short end and a steep bear (economic restart) in the long end.