The US Economy May Not be in for a Smooth Ride, According to Wall Street Analyst
Wall Street analyst Torsten Sløk believes that the prospect of a smooth transition for the U.S. economy is not looking promising. He suggests that there is a greater than 50% chance that the US economy will face a “hard landing or no landing” at all. This shift in perspective comes as new economic indicators emerge, indicating that the economy may not be in for a gentle economic deceleration as previously hoped.
Strong Job Market But Delayed Impacts of Interest Rate Hikes
New economic indicators such as a surge in high-yield and investment-grade bond issuance, a rejuvenation in the Initial Public Offering (IPO) market, and an uptick in mergers and acquisitions activity have contributed to a robust job market. Nevertheless, Sløk cautions against optimism due to the delayed impacts of the Federal Reserve’s interest rate hikes, which have started to cool consumer spending and corporate borrowing.
Inflation Data Dampens Expectations of Interest Rate Cuts
The US cryptocurrency market saw a $60 billion drop after the core consumer price index (CPI) rose 0.4% from December, exceeding forecasts and marking the highest increase in eight months. The data has dampened expectations of an imminent interest rate cut by the Federal Reserve, and any resurgence in inflation could even spark discussions about resuming rate hikes.
Bitcoin’s Price and Inflows to Spot Bitcoin Exchange-Traded Funds
Bitcoin’s price recently surpassed $50,000 as the spot Bitcoin exchange-traded funds (ETFs) in the US keep on attracting inflows. Data shows that these ETFs have brought in roughly $3 billion in net flows since launch, and cryptocurrency investment products attracted $1.11 billion in inflows over the past week, with Bitcoin-focused products making up 98% of total inflows.
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