The Fed may be forced to cut interest rates this month, and the market shift makes a recession more likely.
On August 5, the Fed may be forced to cut interest rates before the next meeting in September to prevent a feedback loop between the market and the real economy that triggers a recession.
The Bank of Japan raised interest rates earlier, and weaker-than-expected US economic data triggered a loosening of the huge global imbalances that had accumulated to extreme levels. But the pace of economic deterioration has not suddenly accelerated - last week's employment data was not a sure sign of a recession, and the triggering of the "Sam Rule" only diverted market attention, and increased geopolitical tensions also became a booster.
The economic situation is not dramatically different, but the market's shift to pricing in a recession prospect makes a recession more likely. The Fed may now be forced to cut interest rates this month to prevent the decline in asset prices from being transmitted to the real economy and triggering a recession.
One-day market, global shock.
Hurry up and cut interest rates.
