Galaxy Securities pointed out that the easing path for the first quarter will be downgrades and structural interest rate cuts. First, fiscal policy is forward-looking, and monetary policy actively cooperates with fiscal coordination. The 50BP downgrade is expected to be implemented, saving bank costs, releasing about 1 trillion dollars of liquidity, and comprehensively using tools such as open market trading of treasury bonds and buyout reverse repurchases to maintain abundant liquidity to match the issuance of government bonds; second, interest rate cuts will be more flexible and efficient, and structural interest rate cuts are a better choice. Currently, the cost of social financing continues to decline and faces constraints due to interest rate comparison relationships. The central bank may choose to cut interest rates on some structural monetary policy instruments in a more targeted manner to support the expansion of domestic demand, technological innovation, and financing needs in the three key areas of micro, small and medium-sized enterprises. At the same time, PSL interest rates are also expected to be lowered; third, comprehensive interest rate cuts will still have to wait. Stabilizing expectations, stabilizing employment, and stabilizing the market will be the main lines for observing the possibility of implementing comprehensive interest rate cuts. On the one hand, raise awareness of worries. If the game between China and the US experiences another twists and turns, monetary policy is expected to be the first to boost expectations. On the other hand, strengthen bottom-line thinking. If the pressure of structural unemployment increases, it will push for the implementation of monetary policy easing. At the same time, real estate risks and financial market risks may also trigger the implementation of comprehensive interest rate cuts. Interest rates are expected to be cut 1-2 times throughout the year, leading to a total reduction of 10-20BP in policy interest rates, which will guide LPR downward and lead to a further decline in interest rates on loans and deposits.

Galaxy Securities pointed out that the easing path for the first quarter will be downgrades and structural interest rate cuts. First, fiscal policy is forward-looking, and monetary policy actively cooperates with fiscal coordination. The 50BP downgrade is expected to be implemented, saving bank costs, releasing about 1 trillion dollars of liquidity, and comprehensively using tools such as open market trading of treasury bonds and buyout reverse repurchases to maintain abundant liquidity to match the issuance of government bonds; second, interest rate cuts will be more flexible and efficient, and structural interest rate cuts are a better choice. Currently, the cost of social financing continues to decline and faces constraints due to interest rate comparison relationships. The central bank may choose to cut interest rates on some structural monetary policy instruments in a more targeted manner to support the expansion of domestic demand, technological innovation, and financing needs in the three key areas of micro, small and medium-sized enterprises. At the same time, PSL interest rates are also expected to be lowered; third, comprehensive interest rate cuts will still have to wait. Stabilizing expectations, stabilizing employment, and stabilizing the market will be the main lines for observing the possibility of implementing comprehensive interest rate cuts. On the one hand, raise awareness of worries. If the game between China and the US experiences another twists and turns, monetary policy is expected to be the first to boost expectations. On the other hand, strengthen bottom-line thinking. If the pressure of structural unemployment increases, it will push for the implementation of monetary policy easing. At the same time, real estate risks and financial market risks may also trigger the implementation of comprehensive interest rate cuts. Interest rates are expected to be cut 1-2 times throughout the year, leading to a total reduction of 10-20BP in policy interest rates, which will guide LPR downward and lead to a further decline in interest rates on loans and deposits.