Analysis of Central Bank Policy Balance and Industry Benefits Under Inverted China-US Interest Rate Spread

After the Federal Reserve’s third interest rate cut in December 2025, the federal funds rate fell to the range of 3.50-3.75%, while China’s 1-year LPR remained at 3.00% for the seventh consecutive month, and the inverted interest rate spread pattern continued [3][6]. Against this backdrop, the central bank faces a dilemma between cutting interest rates to stimulate the economy and maintaining exchange rate stability. To balance this contradiction, the central bank will use “precision drip irrigation” tools such as RRR cuts and structural re-lending: RRR cuts can release long-term funds without directly affecting deposit and loan interest rates, reducing pressure on the exchange rate; structural re-lending will定向引导 liquidity to specific areas, achieving a balance between growth stability and exchange rate stability [0][4]. In addition, the Central Economic Work Conference emphasizes coordinated policy efforts, and monetary policy will cooperate with fiscal policy to jointly support economic growth [3].

1. Infrastructure and Real Estate
   : Marginal improvements in liquidity can reduce financing costs, support government investment and real estate projects, and related industry stocks may benefit [5].
2. Technological Innovation and Manufacturing
   : Structural re-lending tends to support high-end manufacturing, AI infrastructure and other fields, promote industrial upgrading, and relevant enterprises will receive targeted capital support [0][5].
3. Small and Micro Enterprises and Consumption
   : Precision drip irrigation policies can alleviate the financing difficulties of small and micro enterprises, thereby stimulating consumption recovery [3].

1. The core logic of the central bank’s policy choice is to avoid exchange rate pressure caused by comprehensive interest rate cuts, release liquidity in a targeted manner through structural tools, and achieve precise allocation of funds, which reflects the flexibility and targeting of the policy.
2. Although the Federal Reserve’s interest rate cuts have narrowed the interest rate spread, the inverted spread still exists, which means the central bank’s policy space is still constrained by external factors.
3. The degree of industry benefit will depend on the transmission efficiency of liquidity. If funds can effectively flow to target areas, the growth potential of industries such as technological innovation and infrastructure will be further released; otherwise, the policy effect may be discounted.

1. The specific scale and timing of RRR cuts and structural re-lending have not been announced, and the actual impact needs to be evaluated in combination with policy implementation.
2. The external interest rate environment still has uncertainties. If the Federal Reserve slows down the pace of interest rate cuts or raises interest rates in the future, it may form new constraints on the central bank’s policy space.
3. Uncertainty in liquidity transmission efficiency. If funds flow away from target areas, it will affect the effectiveness of policy implementation.

1. The infrastructure and real estate industries will benefit from lower financing costs, and the advancement of investment projects may drive the development of related industrial chains.
2. Technological innovation and manufacturing will receive targeted capital support, and the speed of industrial upgrading and technological progress may accelerate.
3. The improvement of the financing environment for small and micro enterprises will stimulate consumption recovery, and consumption-related industries may usher in growth opportunities.

This report analyzes the central bank’s policy balance strategy and industry impact under the background of inverted China-US interest rate spread. The study shows that the central bank will use targeted tools such as RRR cuts and structural re-lending, and work in concert with fiscal policies to balance the contradiction between exchange rate stability and growth stability. The beneficiary industries mainly include infrastructure and real estate, technological innovation and manufacturing, small and micro enterprises, and consumption. The policy effect will depend on the liquidity transmission efficiency and changes in the external environment, and it is necessary to pay close attention to policy implementation and capital flow.