Analyst: The Federal Reserve may be forced to make an emergency rate cut this month

ChainCatcher news, analysts indicate that the Federal Reserve 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 could trigger a recession.

Previously, the Bank of Japan raised interest rates, and weaker-than-expected U.S. economic data triggered a loosening of the massive global imbalances that had accumulated to extreme levels. However, the pace of economic deterioration has not suddenly accelerated—last week's employment data was not a definitive sign of recession, and the triggering of the "Sam Rule" merely shifted market attention, with escalating geopolitical tensions also acting as a catalyst. The economic situation is not significantly different, but the market's shift towards pricing in recession prospects makes a recession more likely. The Federal Reserve may now be forced to cut interest rates within this month to prevent declines in asset prices from transmitting to the real economy, triggering an economic recession.