[CITIC Securities: The Federal Reserve is expected to pause rate cuts in January 2026] A research report by CITIC Securities pointed out that, compared to the V-shaped reversal in market expectations for Federal Reserve rate cuts in November, there were no significant changes in the macro narrative for developed economies in December. The U.S. unemployment rate rose in November, and CPI inflation cooled unexpectedly, but neither altered market expectations for Federal Reserve rate cuts. Both the overseas macro team at CITIC Securities and CLSA expect the Federal Reserve to pause rate cuts in January 2026. Economic sentiment in the Eurozone continues to decline, with growth momentum remaining weak. Against the backdrop of the European Central Bank maintaining interest rates, Germany increasing its debt issuance, and political instability in France, the overseas macro team at CITIC Securities advises caution regarding long-term Eurozone bonds. The Bank of Japan raised interest rates by 25bps as scheduled in December 2025, bringing the policy rate to a 30-year high of 0.75%. Both the overseas macro team at CITIC Securities and CLSA expect Japan's policy rate to reach 1% in 2026. South Korea's growth outlook is improving, and inflation is likely to remain slightly above target. CLSA expects the Bank of Korea to cut interest rates by 25bps in January 2026.