Economists are notoriously terrible at forecasting recessions, historically, the best that forecasters have been able to do consistently is to recognize that we’re in a recession once we’re in one. Many market participants think that the fed’s recent preemptive move (insurance cut) and more rate cuts this fall will keep recession at bay or prevent the economy from slowing down. But don’t expect the Fed’s rate cut to make all that much of a difference for the economy in the long run. This time, the rates are already so low that it is impossible to cut them four or five percentage points in the face of a recession, as the Fed has done in the past. The real problem is that recent experience and new economic research suggests that rate cuts in general may have a more modest impact on the economy now than they usually do, the reason is that the benefits of Fed rate cuts in today’s environment may be substantially overrated after 10 years of extremely low interest rates, there probably aren’t many consumers with pent-up demand, waiting for rates to fall. The Fed has less room to cut rates, and the benefit from cutting them is smaller than usual. Market may melt up for rest of 2019 based on another round of liquidity binge but 2020 could test if the Feds intervention still has its efficacy.