Recently, Bjorn Jesch, Chief Investment Officer of DWS Global, pointed out that the S&P 500 index has fallen about 7% from its recent highs. According to DWS's fundamental economic and profit forecasts, they still do not expect a technical bear market (a decline of 20% or more, equivalent to the index falling below 4500 points) to occur. However, they will closely monitor the risks brought about by the recent market volatility, including the forced deleveraging of high leverage investors. Therefore, they will also closely monitor various indicators reflecting systemic risks. Bjorn Jesch stated that after the market turbulence last Friday (2nd) and over the weekend, financial markets did not show stability on Monday (5th). The Japanese stock market recorded its largest drop since 1987 in the early stages, with the sharp rise of the yen being one of the main reasons. The VIX volatility index soared from over 20 points to over 60 points in just a few hours, reaching a new high since the outbreak of the COVID-19 pandemic in early 2020. The recent dominant market sentiment of the "Trump trade" has now reversed, leading to a sharp decline in US small stocks, the US dollar, and cryptocurrencies. DWS expects the Federal Reserve to continue with its established policy path and not necessarily change its stance due to market panic. A sudden 50 basis point rate cut or a rate cut between meetings would be seen as a significant policy reversal, which the Federal Reserve will carefully avoid. Instead, DWS's basic forecast remains that the Federal Reserve will gradually begin lowering interest rates by 25 basis points three times in the coming months starting in September. Although a recession in the United States is not DWS's basic expectation, the possibility cannot be completely ruled out. The bond market currently reflects a very high probability of a recession, with the yield on 10-year US Treasuries falling to 3.70%. However, even in the event of a recession, considering the overall economic strength and the solid financial position of the private sector, it is expected to be a mild recession.