Analysis: Fed rate cuts can reduce recession likelihood, but they can't go to zero

Steven Blit, an American economist at TS Lombard, said that if the Fed does not act soon, people will look for signs that the economy is heading for a recession, rather than looking for indicators of a recession itself. The continuous emergence of weak data is not a felony that is not conducive to growth, but it will cause problems. If the Fed stagnates, or sits on the sidelines waiting for the data to push, they will repeat the same mistakes, and the probability of entering a recession later this year will climb to 75%. Given that the Fed is expected to signal a 50 basis point rate cut in September soon, the actual probability is even smaller. By the end of the year, they may cut interest rates by 100 basis points. If the Fed acts, the probability of a recession will be lower, but not zero. (Jinshi)