Potential AI Optimism Concerns Could Influence Federal Reserve's Interest Rate Decisions

According to Odaily, concerns over excessive optimism regarding artificial intelligence could lead to increased market volatility, potentially prompting the Federal Reserve to consider lowering interest rates. However, this scenario is not the baseline expectation. Traditionally, the Federal Reserve intervenes only when liquidity dries up or market functionality is impaired. Despite a noticeable deterioration in market sentiment and performance, a crisis seems distant, especially following last Friday's rebound. This time, the Federal Reserve might act before conditions worsen significantly. Many economists, and even some policymakers, acknowledge that the current health of the 'real economy' is more dependent on Wall Street's wealth than ever before.