Analysis: Increased volatility in US stocks could force the Federal Reserve to cut interest rates.

A Reuters columnist points out that if concerns about excessive optimism surrounding artificial intelligence continue to fester, causing recent market volatility to escalate into more severe shocks, the financial stability risks triggered by a sharp drop in asset prices could force the Federal Reserve to cut interest rates. Of course, this is not the baseline scenario. Traditionally, the Fed will not intervene to appease the market unless liquidity dries up and market function is impaired. Although market sentiment and performance have clearly deteriorated, a crisis is still far off, especially after last Friday's rebound. But this time, the Fed may not need to wait until the situation worsens before taking action. The reason is that, according to many economists, and even some policymakers, the health of the "real economy" is now more dependent than ever on Wall Street's wealth. (Jinshi)