Standard Chartered: Fed Unlikely to Cut Rates This Year; Higher Probability of Extreme Scenarios in Global Markets

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Standard Chartered Bank has released a research report forecasting that the global economic growth rate will hold steady at 3.4% in 2026, matching the rate projected for 2025. New drivers of economic growth are beginning to emerge, with future expansion likely to be increasingly fueled by domestic demand and fiscal policies. The bank indicated that U.S. economic growth is expected to remain robust, with its growth forecast being revised upwards from 1.7% to 2.3%. Persistent inflationary pressures in the U.S. may constrain the Federal Reserve's ability to implement further policy easing, leading to the expectation that the Fed will not enact any interest rate cuts for the remainder of the year. However, policy uncertainty, the upcoming U.S. midterm elections, and the impending leadership transition at the Federal Reserve could all influence investment sentiment and potential shifts in policy direction. Looking ahead, Standard Chartered noted that as market risk factors intensify, trade policy uncertainties persist, and geopolitical risks encompass a broader range of regions, the probability of extreme scenarios materializing in global markets this year is higher. Regarding China's economy, the bank anticipates that mainland economic growth will maintain a steady momentum, driven by technology-related investments, productivity gains, and policies aimed at stimulating domestic demand. Even if China's foreign trade growth moderates this year, its proactive efforts to diversify trading partners and the easing of Sino-U.S. trade frictions are expected to help mitigate the related impacts.

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