Fed Cuts Rates for the Third Time — Is the U.S. Economy Quietly Slipping Toward Recession?
The Federal Reserve has slashed interest rates for the third time in 2025, bringing the federal funds rate down to 3.5%–3.75%. While markets initially welcomed the move, one thing is becoming increasingly clear: investors are now more worried than relieved.
Despite the Fed’s optimistic tone, many analysts believe this rate cut reveals something deeper—the U.S. economy is losing steam beneath the surface.
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Why Experts Believe This Rate Cut Isn’t a “Victory”
After September and October’s cuts, the Fed once again lowered interest rates, bringing borrowing costs to their lowest levels since late 2022. Yet in its official statement, the central bank admitted what many feared:
Hiring is slowing
Unemployment is slightly rising
Economic growth is losing momentum
The Fed even acknowledged that “downside risks to employment have increased in recent months,” a line rarely used unless policymakers are genuinely concerned.
Normally, lower interest rates push stocks and crypto higher—but this time the mood feels different.
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Economists Warn: More Cuts Could Mean Trouble Ahead
Economist Claudia Sahm delivered a stark warning: If the Fed keeps cutting, it may signal the economy is already weakening, not recovering.
Even the Fed’s own dot plot reinforces the caution—only one more cut is projected for 2026, and seven officials expect no further cuts at all.
Sahm summarized the situation perfectly:
> “If Powell ends up cutting a lot more… the economy may already be in bad shape. Be careful what you wish for.”
This uncertainty deepened when the Fed simultaneously announced $40 billion in Treasury bill purchases—a move often used to provide liquidity during financial stress.
Henrik Zeberg from Swissblock didn’t hold back:
> “The economy is rolling over. Liquidity is tightening. Consumers are crushed. This path ends in a recession.”
According to Zeberg, his economic model has been signaling a slowdown since late 2024—indicating the U.S. may already be sliding in that direction.
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Recession Alerts Intensify: Layoffs Spike, Small Businesses Hit Crisis Levels
Multiple recession indicators are now flashing red:
📌 Layoffs Surging
U.S. employers have already announced 1.2 million layoffs this year.
This is the highest since the pandemic and matches levels seen during the early phase of the Great Recession.
Analysts note that once yearly layoffs cross 1 million, a recession is usually either imminent or already underway.
📌 Small Business Bankruptcies Skyrocket
The Kobeissi Letter reported:
2,221 small businesses have filed for bankruptcy under Subchapter V—an all-time high.
Bankruptcies have risen 83% in just five years, despite the debt limit being reduced from $7.5M to $3M.
Drivers include:
High borrowing costs
Cautious consumer spending
Persistent economic uncertainty
In short, Main Street is struggling like it’s already in a recession.
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What This Means for Investors — Especially in Crypto
The U.S. economy is entering a critical phase. Rate cuts may bring temporary relief, but they can’t mask deeper structural weaknesses.
Now the biggest question becomes:
Will Bitcoin behave like digital gold—or follow risk markets downward?
If recession fears continue to rise:
Some investors may treat BTC as a safe haven
Others may bail out of risk assets entirely
Either way, the next few months will test the resilience of both the U.S. economy and the broader crypto market. $BTC $ETH $USTC #America