Economist Rosenberg recently made a bold prediction: the biggest risk facing the US in 2026 may not be a mild recession, but a direct collapse of the labor market. His core point is quite sobering—unemployment could break above 6% by the end of the year, forcing the Federal Reserve to aggressively cut interest rates by 125 basis points, bringing the federal funds rate down to 2.25%.

The truth behind the data is even more concerning. The unemployment rate has risen from 4% at the start of the year to 4.6%, with layoffs reaching a new high in the past year, while the hiring market has frozen. The most troubling aspect is that seemingly moderate unemployment data may hide a deeper crisis—tariff policies have directly destroyed over 70,000 manufacturing jobs, a wave of bankruptcies is spreading, and employment growth next year could be zero.

Wall Street’s optimistic outlook on GDP performance also has issues. Behind the impressive economic growth is a result driven by a sharp contraction in imports. Real living indicators are deteriorating: household savings rates have collapsed, income growth has stagnated, and consumption is polarizing along a K-shaped curve. The purchasing power of ordinary consumers has significantly shrunk, retail growth is only 0.2%, and spending on non-essential goods is declining across the board.

There are clear disagreements within Wall Street regarding the magnitude of rate cuts. Most institutions still expect only a 50 basis point cut, but Rosenberg insists that economic pressures are strong enough to support an aggressive 125 basis point move. The hawks and doves within the Federal Reserve are also fiercely debating, with the core issue being whether inflation can truly stabilize—hawks worry about persistent inflation, while the overall market expects prices to gradually decline.

Can tax rebate stimulus policies save the situation? The effect may be limited. Such measures could instead add an additional $2.8 trillion in deficit pressure, while social spending is passively cut. Employment landmines, false prosperity, and conflicting policy goals—America’s economy in 2026 is walking a very dangerous tightrope. This macroeconomic backdrop has profound implications for the valuation logic of Bitcoin($BTC), Ethereum, and other crypto assets.