The U.S. economic recession has sounded the alarm. Contrary to what many people believe, investment research company BCA Research believes that the economy is on the verge of recession. Even if the Federal Reserve cuts interest rates three times this year, it will not be enough to guide the market out of recession.

CNBC reported that Garry Evans, chief strategist of global asset allocation at BCA Research, pointed to signs of an economic slowdown, including a "deteriorating" U.S. labor market, with the Labor Department reporting that the unemployment rate edged up to 4.3% in July. , hitting the highest level since October 2021, with an indicator of U.S. manufacturing activity falling to an eight-month low in the same month. "Something is falling apart very quickly right now," Evans said.

The federal funds futures market suggests investors expect at least three rate cuts by the end of the year, according to data from CME Group's FedWatch tool. But Evans said that wouldn't have a big impact on his predictions.

He pointed out that "several rate cuts cannot prevent an economic recession. The average recession period is 10 months. It actually takes about a year for the Fed to cut interest rates to really start to boost the economy."

The federal funds rate is currently 5.3%, and the market believes it will return to 3% by the end of next year. In this case, unless the economy is in recession, this will not happen.

He further pointed out that a recession usually occurs when a country's real GDP declines for two consecutive quarters.

Over the past century, there have been more than a dozen economic recessions, some lasting as long as a year and a half.

Although the U.S. is not officially in recession, a survey conducted by Affirm shows that about three-fifths of Americans believe that the United States is indeed in recession.

Traders are also keeping a close eye on this week's annual economic policy symposium in Jackson Hole, which could provide more clarity on the outlook for interest rates, where Federal Reserve Chairman Jerome Powell is due to speak on Friday.