Barclays stated that one of the factors that may keep interest rates high in the USA is its (inflation) policy. During the December meeting, some FOMC participants apparently began to reflect expectations for tariffs in their inflation forecasts. Furthermore, even among those who did not adjust their official forecasts, many now believe that the balance of inflation risks tends to lean upward. Although Powell did not clearly answer to what extent the Federal Reserve is inclined to view the price level increases related to tariffs, it is believed that continuing to lower interest rates will be a challenge, especially in the context of rising inflation rates in recent years, given the expectation that tariffs will lead to intensified inflation in the second half of 2025. It is expected that the Federal Reserve will pause rate cuts after June next year and will resume them around mid-2026 after the inflation pressures caused by tariffs dissipate. In our baseline, we expect two 25 basis point cuts in 2026, with the terminal rate being 3.25-3.50%.