Da Mo: It is unlikely that the Federal Reserve will raise interest rates in the second half of the year, and may even continue to lower rates next year According to a report by Golden Finance, on July 6th, Xing Ziqiang, Chief Economist of Morgan Stanley China, shared his latest insights during a closed door meeting on Monday, focusing on topics such as the global AI financing boom, the direction of Federal Reserve policies, and the rebalancing of domestic demand in China. He pointed out that the main themes currently dominating the global market are still AI and energy. In order to support massive capital expenditures, American technology giants may raise nearly trillions of dollars in the coming year through markets such as bonds, equity, and loans, which will significantly drain global micro liquidity and make the market more sensitive to changes in Federal Reserve interest rates. Regarding the Federal Reserve, Xing Ziqiang believes that the market is overly concerned about interest rate hikes and expects that it is unlikely to raise interest rates in the second half of the year, and may even continue to do so next year; But the new chairman of the Federal Reserve, Kevin Walsh, reducing forward guidance and returning to policy opacity will exacerbate financial market volatility. Returning to the Chinese economy, the expected year-on-year GDP growth rate in the second quarter is only around 4.4%, which is significantly lower than the first quarter. Xing Ziqiang suggests rebalancing from two aspects: in the short term, most of the export tax rebates for high-tech industries can be cancelled, and instead used for tax reduction and fee reduction in domestic consumption and service industries; In the medium to long term, it is necessary to strengthen social security and enhance the consumption power of the middle and low-income groups after secondary distribution. But he judged that the most likely main trend in the second half of the year is not to directly stimulate consumption on a large scale, but to accelerate the construction of the "six networks" of technology independence and energy security by using the unused quota of about 2 trillion yuan in fiscal and local bonds. In addition, Laura Wang Ying, Chief Strategist of Morgan Stanley, stated that the US job market is not overheated, and the possibility of a rate hike in July is minimal. Instead, the first half of 2027 may enter a rate cut channel. She believes that the flattening of oil prices and the reduction of inflationary pressures are relatively favorable for risk assets; Despite the short-term increase in market volatility, there has not been a fundamental shift observed. The AI super cycle, the super cycle of energy capital expenditure, is a cross year, multi year opportunity. Regarding the Chinese market, she does not agree with the concern that the listing of giant companies will squeeze liquidity. Instead, she believes that the listing of such companies is expected to attract more investors to participate. And since the beginning of the year, the national team has sold over $150 billion worth of A-share positions, with the ability to help smooth out market volatility.