In a financial note, Michael Hartnett, a strategist at Bank of America told clients of a dark outlook in the U.S. with economic recession shock.
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Chief Investment Strategist at Bank of America (BoFA)Michael Hartnett, explained yesterday in a weekly financial note to the bank’s customers that the U.S. economy could go into recession.
The strategist’s note from BoFA further detailed that cryptocurrencies could outperform bonds and stocks.
Specifically, the analyst warned that the U.S. economy could feel significant economic impacts. In recent times, inflation in the United States has soared and the Federal Reserve (Fed) has felt the need to step in and manage the problem. On March 16, the U.S. Federal Reserve raised the benchmark benchmarking is a method of comparing the performance of your asset or investment portfolio to that of similar assets to see whether there is a gap that can be bridged by increasing performance indicators. bank rate for the first time since 2018 andel banco central espera seis aumentos más este año.
Ayer, Reuters published that Harnett warns that the macroeconomic situation is worsening.
En la nota, advirtió que el deterioro podría conducir a una recesión en Estados Unidos, ya que la Reserva Federal lucha por enfriar la alta inflación de cuatro décadas endureciendo sus políticas, y los inversionistas expect a 50 basis point hike in the key interest rate
Hartnett explained:
“The ‘inflationary shock’ is getting worse, the ‘rate shock’ has just begun, the ‘recession shock’ is coming.”
Towards a recession
So, with the macroeconomic environment in calamity, the Fed raising rates and the central bank reducing large asset purchases, the BoFA strategist said the U.S. economy could be headed for a recession.
The BoFA analyst’s statements follow US bond markets also indicating that an economic recession is in the offing. This took place last week when the spread a price difference between asking and selling prices of the asset. between the 2-year and 10-year Treasury yields reversed, indicating that the plight of the U.S. economy is likely to continue.
Crypto to the rescue
Hartnett’s note to investors further says that commodities, cash cash is the most liquid form of money: physical coins and banknotes in the most narrow sense of the term. and cryptocurrencies “could outperform bonds and stocks.” The BoFA note said that over the past ten weeks, emerging market an area or arena, online or offline, in which commercial dealings are conducted. equity equity is the funds that would be returned to a company's shareholders if all of the company's assets were dissolved and all debts were paid off in the event of liquidation. funds saw better market performances as did debt vehicles.
According to BoFA’s recent outlook, the bank expects the Fed to raise the benchmark rate by 50 basis points at its next meeting. In addition, mortgage rates hit 5% in April. BoFA has also downgraded nine transportation stocks this week, after citing the “deterioration in demand”.
It’s worth noting that he’s not the only analyst to recently make a comparison between crypto and the stock market. Mike McGlone, an analyst at Bloomberg, said yesterday That cryptocurrencies are ‘coming out ahead’ in the ebbing tide of inflation a general increase in prices and fall in the purchasing value of money. and the low stock market. In addition, he said of Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. trades at three times the volatility a statistical measure of dispersion of returns, measured by using the standard deviation or variance between returns from that same security or market index. of Nasdaq now.
Bank of America y las cripto
Vale señalar que durante los últimos meses, Bank of America has talked a lot about cryptocurrencies. In February, for example, one analyst pointed out that Bitcoin should be seen more as a risk asset than as an inflation hedge, given its volatility. . Además, un analista del banco dijo en enero que la capitalización de mercado del token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. de la plataforma de contrato inteligente Solana could take market share away from the current leader Ethereum a decentralized open-source blockchain with smart contracts functionality. ypodría convertirse en la “visa” del ecosistema cripto. Earlier, in December, the bank talked about thatlas criptomonedas serían las monedas del metaverso.
In July last year, the bank created a team to investigate cryptocurrencies .
Sources: Reuters , Finbold, Bitcoin.com , archivo
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