Why is a recession considered the least concerning risk? It’s not that the market won’t drop when there are recession signals; it has been hitting new highs, and any reason can cause the stock market to fall. However, recession signals mean the Federal Reserve will cut interest rates, which indicates a decline in inflation. Do I believe the Federal Reserve can save the labor market? I do; am I worried about stagflation? Not really, because China has enough deflation to export, and there are no issues on the global supply side. If the demand side decreases due to recession risks, I don’t see inflation or stagflation risks. Also, what was the turning point for the Federal Reserve to adopt a hawkish stance in 2021? It was rising wages! Now, the labor market has been slowing down, and wage growth is not picking up (but remains stable at a level higher than during the pandemic), showing no signs of inflation rebound.