Golden Finance reported that Barclays Bank said that one of the factors that may keep U.S. interest rates high is U.S. (inflation) policy. At the December meeting, some FOMC participants apparently began to reflect expectations for tariffs in their inflation forecasts. Moreover, even among those who have not revised official forecasts, many now believe the balance of inflation risks is tilted to the upside. While Powell did not explicitly answer the question to what extent the Fed is leaning toward looking through tariff-related increases in price levels, we believe that tariffs are expected to lead to higher inflation in the second half of 2025, especially after rising inflation in recent years. Against this background, it will be a challenge for the Fed to continue cutting interest rates. We expect the Fed to pause interest rate cuts after June next year and resume rate cuts around mid-2026 after tariff-induced inflationary pressures dissipate. In our baseline, we expect two 25 basis point rate cuts in 2026, with a terminal rate of 3.25-3.50%.