Economic Outlook - The probability of the US economy entering a recession within the next 12 months is estimated at 49% according to a prediction by Moody's chief economist Mark Zandi, based on a complex machine learning model [1] - Over half of the industries have initiated layoffs, a phenomenon that aligns closely with historical indicators of impending economic recessions [1] Policy Impact - The negative impacts of tariffs and immigration restrictions from the Trump administration are expected to peak between late 2025 and early 2026, contributing to an "economic winter" [3] - The actual tariff rate in the US has reached 23%, the highest in a century, leading to increased operational costs for businesses and potential price hikes for consumers [6] Economic Indicators - The US GDP growth rate is projected to plummet from 3% in Q2 to 1%, while inflation could rise to a peak of 3.5% [5] - Employment growth has significantly declined, with potential job growth dropping from 206,000 in Q1 to just 28,000 by July, far below the 90,000 needed to maintain economic stability [5] Federal Reserve Actions - The Federal Reserve is expected to implement a series of interest rate cuts, with predictions of three consecutive cuts in September, October, and December, followed by two more in 2026 [6] - There is a notable division among Federal Reserve officials regarding interest rate predictions for 2025, complicating the formulation of a unified monetary policy [7] Market Reactions - The US stock market is experiencing a "high valuation trap," with significant sell-offs occurring despite some companies reporting better-than-expected earnings [8] - Concerns about the US dollar's valuation persist, with Goldman Sachs indicating that the actual exchange rate is overvalued by 15% [8] Broader Economic Challenges - The US economy is facing a confluence of high inflation, rising unemployment, and economic slowdown, presenting one of the most severe challenges since the 1970s [10]