Fed Delivers Third Rate Cut—Is a Recession Now Inevitable?

The Federal Reserve implemented its third interest rate cut of 2025, lowering the federal funds rate to the 3.5%-3.75% range, the lowest since November 2022. While rate cuts typically boost markets, many analysts view this move as a warning sign of underlying economic weakness, citing cooling labor markets, slower hiring, and elevated inflation risks. The Fed acknowledged downside risks to employment. Furthermore, the central bank announced it will purchase $40 billion in Treasury bills, which some economists interpret as exposing fragility. Experts like Claudia Sahm caution that aggressive future cuts imply a poor economy, while others suggest the consumer is already 'crushed.' Compounding these concerns, recession indicators are flashing red, with US layoffs surpassing 1.2 million year-to-date—the highest level since the Great Recession—and small business bankruptcies surging 83% over five years due to high borrowing costs and cautious consumer spending.

(Source：BeInCrypto)