Bank of America analyst David Rosenberg recently put forward a thought-provoking view: the US economy may face more severe challenges next year than expected.

He believes the real risk lies in the labor market — this is not just a cooling down, but a potential substantial contraction. Currently, the market is still discussing a slowdown in employment, but David expects the unemployment rate to soon break through the 5% key level, and possibly reach 6% by the end of the year.

Once the labor market deteriorates to this extent, a recession will be almost certain. Such a scenario will ultimately push the Federal Reserve into a corner — forcing it to adopt aggressive rate cuts to stabilize the market.

David's forecast is: the Federal Reserve will cut interest rates by a total of 125 basis points to 2.25% before the end of 2026, which means five consecutive cuts of 25 basis points each. Such a magnitude of rate cuts is quite rare in the current environment. The key question is whether the worsening unemployment rate will really develop according to this script, which will have a profound impact on liquidity and risk appetite in the crypto market.