From the current data and policy background, this interest rate cut is more inclined towards a preventive rate cut rather than a "recession rate cut"; the probability of a big dump in the market is low, but we must be vigilant about the risk of inflation rebound and policy expectation fluctuation; compared to last year, the driving factors for the rate cut and market impact have similarities, but the risk structure is different. Here is a specific analysis:

1. Does this rate cut belong to a "recession rate cut"?

To determine whether it is a "recession interest rate cut," one must clarify its definition: a recession interest rate cut usually occurs during a significant economic downturn (such as consecutive negative GDP growth and a sharp rise in unemployment), with the aim of urgently stimulating the economy, involving large and prolonged interest rate cuts (for example, the interest rate cuts during the 2008 financial crisis or the 2020 pandemic). However, the current economic context is more in line with a "preventive interest rate cut:"

1. The job market is cooling down but has not collapsed:
According to Jinshi data, the benchmark change in non-farm employment in the U.S. for 2025 is initially set at -910,000, significantly lower than the expected -700,000. Furthermore, over the 12 months ending in March 2025, private non-farm employment decreased by 880,000, with multiple sectors (trade, leisure and hospitality, professional services, etc.) experiencing job declines. Although the unemployment rate has risen to 4.3% (the highest since November 2021), there has not been a "surge" similar to that of 2008, and the labor participation rate remains stable.
2. The economy has not entered a full recession:
The Atlanta Fed's GDPNow model previously predicted a seasonally adjusted annual rate of -2.1% for GDP in the first quarter of 2025, but this is more influenced by short-term factors such as expectations surrounding Trump's policies and cold winter weather, rather than a sustained structural recession. Consumer resilience remains, and household balance sheets are relatively healthy.
3. Inflation pressure is controllable:
Core PCE inflation is close to the Federal Reserve's 2% target (with core PCE at 3.2% when interest rates are cut in 2024). Although there is a risk of a "wage-inflation spiral" (with hourly wage growth in the service sector still reaching 0.3%), there are no signs of it getting out of control. This is different from the backdrop of inflation typically being subdued or even deflationary during "recession rate cuts."

II. Will the market experience a big dump?

Historical experience shows that during a preventive interest rate cut cycle, the market usually does not big dump; instead, it may迎来 structural opportunities due to expectations of policy easing, but the following risks should be noted:

1. Short-term Fluctuation and Expectation Game:
If the rate cut is less than expected (for example, the market expects 50BP but the actual is 25BP), or if inflation data rebounds (such as core CPI exceeding 3%), the US stock market may adjust (similar to the "rise then fall" of the market after the rate cut in November 2024). However, the current market has fully priced in the expectations of a rate cut (with a probability of over 95% for a cut in September), so the likelihood of significant fluctuations is relatively low.
2. The direction of asset benefits is clear:
- Stock Market: Tech stocks (Apple, Nvidia), Real Estate (Lennar, D.R. Horton), and Small Caps (Russell 2000 Index) benefit from lower financing costs, with the S&P 500 historically averaging a 10%-15% increase during precautionary rate-cut cycles.
- Bond Market: The yield on 10-year U.S. Treasuries may fall from 4.3% to 4.0%, and the default risk of high-yield bonds decreases.
- Gold: Interest rate cuts reduce the attractiveness of the dollar, and gold prices may rise further from $2500/oz (historical interest rate cut cycles show an average increase of 15%-20% for gold).
3. Risk Points: Inflation and Tariffs:
If Trump's tariff policy (averaging 18.4%) raises the prices of imported goods, or if energy prices rebound, it could trigger "secondary inflation," leading to a shift in Federal Reserve policy, which in turn could suppress risk assets.

3. Comparison with the impact of interest rate cuts last year (2024)

The interest rate cuts in 2024 and 2025 are both preventive cuts, but the driving factors and market reactions differ:

Dimension 2024 interest rate cut 2025 interest rate cut
Trigger reasons: Inflation fell from 3.9% to 3.2%, initial signs of cooling in the job market, accelerated weakness in the job market (unemployment rate 4.3%), GDP under short-term pressure.
Interest rate cut of 100 BP in total (50 BP in September + 25 BP in November + 25 BP in December) is expected to accumulate to 75-100 BP (50 BP in September, followed by 25 BP each time).
Market reaction: U.S. stocks first rise and then fluctuate, with technology stocks leading the gains; gold rises 20%. Technology stocks, real estate, and gold may continue to be strong; beware of inflation rebound.
Policy risks Inflation "the last mile" pressure (core CPI remains above 3%) "wage-inflation spiral" + dual risks of tariff policy pushing up inflation

IV. Conclusion

1. This rate cut is not a recessionary cut, but a preventive adjustment by the Federal Reserve under the expectation of an economic "soft landing," aimed at alleviating the cooling pressure on the labor market and avoiding an economic hard landing.
2. The probability of a market big dump is low, but attention should be paid to the interest rate cut in September (25BP vs 50BP) and subsequent inflation data. If the interest rate cut is implemented, technology stocks, real estate, and gold will still be the main beneficiaries.
3. Compared to last year, both are preventive rate cuts, but with a weaker job market and more complex inflation risks in 2025, the policy pace may be "watch and see". Market fluctuations may be greater than last year, but there are still trend opportunities. #美联储降息预期#