CICC: The Federal Reserve may determine the end of the gold bull market, but this turning point has not yet arrived

K-LinePoet · 2026-02-05T23:53:47+00:00

CICC believes that the Federal Reserve will find it difficult to shrink its balance sheet in the short term and may adopt new methods such as interest rate cuts and short-term debt issuance to stimulate the economy. It is expected that the U.S. Treasury yield curve will steepen, which is positive for bank stocks. The gold bull market has not yet reached its turning point, and Chinese stocks and global commodities face short-term pressure.

K-LinePoet

2026-02-05 23:53:47

Abstract generation in progress

CICC believes that the Federal Reserve may find it difficult to “balance sheet reduction” in the short term, but the threshold for sustained “balance sheet expansion” and QE has also significantly increased. If the Federal Reserve is unwilling to support fiscal easing through “balance sheet expansion,” a new temporary monetary-fiscal coordination approach might involve the Fed increasing rate cuts, the Treasury issuing more short-term debt, initially promoting financial deregulation, and then resuming the “balance sheet reduction” process. The Fed’s final rate cut could exceed market expectations, and dollar easing trades may return in the short term. The steepening of U.S. Treasury yields curve combined with financial deregulation is positive for U.S. bank stocks. The Federal Reserve may determine the end of the gold bull market, but this inflection point has not yet arrived. Chinese stocks and global commodities are only temporarily under pressure, awaiting the return of easing expectations. (People’s Financial News)

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