To be honest, if an economic recession does occur, it might not be a bad thing for the market. Looking back at historical data, once US interest rates break 5%, the probability of a recession skyrockets—though the process is painful, it may be the most direct way to suppress inflation. Otherwise, the economy and inflation could fall into a tug-of-war, repeatedly tormenting like a chronic illness. It's like treating a tumor: conservative therapy seems gentle, but only surgical removal can cure it.

Inflation is the tumor, the Federal Reserve is the chief surgeon, and the patient is called the United States. Surgery will inevitably cause bleeding and deplete energy; gradual treatment might help, or it could worsen the condition. If it weren’t for Trump, the country might have already gone into surgery—immediate recession, then rebuilding.

But now it’s different. Trump would never let a recession occur during his term. Earlier this year, he could even blame it on his predecessor. Now that a year has passed, if the economy collapses, how will he handle the 2026 midterm elections? So he will do everything possible to support the economy and push the Fed to cut rates. This is the current game situation.

By May 2026, when Powell steps down, the situation will be truly unpredictable.