The historical pattern of Citibank's review cycle before and after the first rate cut: both US stocks and bonds rise, while gold is strong at first and then stabilizes.

On September 17, according to Citigroup Research, historical data shows that both U.S. stocks and bonds have positive median returns before and after the first rate cut. The median increase in stocks is about 5% 50 days after the rate cut, but there are downside risks in the event of a hard landing. Bonds also benefit from rate cut expectations and actual cuts, with yields typically reaching lows around the first rate cut. The performance of the U.S. dollar index shows a "weak then stable" characteristic, usually weakening before the rate cut but entering a range of fluctuations afterwards. Precious metals such as gold also rise before the introduction of easing policies, but their performance tends to be flat after the actual rate cut, more often showing a range trading pattern. Citigroup analysts indicated that these historical patterns are expected to be validated in 2024, but bond prices are likely to peak around the first rate cut. At that time, the market pricing for the rate cut was relatively aggressive, while the pricing in this cycle is comparatively mild, thus alleviating concerns about the bond outlook. (Wall Street Insight)