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U.S. stocks suffered a panic drop at the opening on Monday. Claudia Sahm, a former Federal Reserve economist who proposed the "Sahm ​​Rule," said that although the United States has not yet fallen into a recession, it is "very close" and predicted that Federal Reserve policymakers may adjust their strategies to deal with the increasing risks.

According to media reports, Sam said on Monday regarding the unexpected rise in unemployment in the July non-farm payrolls report:

“This rise in unemployment has been consistent with the ‘early stages of a recession’ in the past. We may not be there yet, but we are getting very close, and that’s worrying.”

The July nonfarm payrolls report showed a clear slowdown in U.S. hiring, while the unemployment rate rose to 4.3% in July, bringing its three-month moving average up 0.6 percentage points from its 12-month low, triggering the so-called Sam's rule, which states that a recession has begun if the unemployment rate (based on a three-month moving average) rises 0.5 percentage points from last year's low.This indicator has had a 100% prediction accuracy since 1970.

"We do come into this from a generally stronger position," Sam said. "If we look at everything we know about the U.S. economy right now, it's hard to say we're in a recession."

Ahead of Friday's nonfarm report, Fed Chairman Jerome Powell said Wednesday that the "broad range of data" so far showed the labor market was "normalizing." He noted that indicators in the first half of the year "show no signs of weakness in the economy," citing low levels of layoffs, "solid" spending and rising investment.

Sam said that with the recent plunge in financial markets, the "scary word" has become more likely in the eyes of many people, and it is not appropriate for the Fed to take immediate action to respond to the increased risks. "It is important to remain calm at a time like this."

"It's a good thing that the Fed is moving slowly and carefully. The last thing we need is for them to add that kind of emotional energy."

At the same time, Sam also said that Powell and his colleagues may take into account changes in the economy and the market.

Sam said the Fed is "very cautious and will probably move very slowly.But when the facts change and the Fed gets a handle on the situation, the Fed will take action and do what is necessary.”

With the Fed’s benchmark interest rate now in a target range of 5.25% to 5.5%, Sam said Fed policymakers “are in a position now to be able to do quite a bit.”

Wall Street's main indexes tumbled on Monday, dimming hopes for a soft landing as weak economic data, lackluster second-quarter earnings from tech giants and geopolitical tensions rekindled recession fears.

The three major U.S. stock indexes opened lower on Monday, with the Nasdaq falling 6.35% in early trading, the S&P 500 falling 4.09%, the Dow Jones Industrial Average falling 2.69%, and the Russell 2000 falling 5.84%. Among the major sector ETFs in the U.S. stock market, AI androbot, technology, electric vehicles, banks, and oil and gas sectors led the decline. The "Seven Sisters" stock price fell 9%, the biggest drop since 2015.