Bank of America Strategist Warns “Recession Shock” Is Looming and Crypto Could Outperform Stocks and Bonds

For DailyBitcoin Editor

In a financial note, Michael Hartnett, a strategist at Bank of America, spoke to clients about a dark picture in the United States with the shock of an economic recession.


Chief Investment Strategist Bank of America (BoFA)Michael Hartnett explained yesterday in a weekly financial note to bank clients that the The US economy could enter a recession.

The strategist’s note BoFA he further detailed that cryptocurrencies could outperform bonds and stocks.

Specifically, the analyst warned that the US economy could feel significant economic shocks. In recent times, inflation in the United States has skyrocketed and the Federal Reserve (FED) has felt the need to step in and manage the problem. On March 16, the US Federal Reserve raised the benchmark bank rate for the first time since 2018, and the central bank expects six more hikes this year.

Yesterday, Reuters published that Harnett warns that the macroeconomic situation is getting worse.

In the note, he warned that the deterioration could lead to a recession in the United States, as the Federal Reserve struggles to cool four-decade high inflation by tightening its policies, and investors expect a 50 basis point increase in the key interest rate

Hartnett explained:

“’Inflation shock’ worsens, ‘rate shock’ just started, ‘recession shock’ is coming.”

Towards a recession

So, with the macroeconomic environment in turmoil, the Fed raising rates and the central bank cutting back on large asset purchases, the BoFA strategist said the US economy could be headed for a recession.

The BoFA analyst’s remarks follow US bond markets also indicating that an economic downturn is forecast. This took place last week when the spread between the 2-year and 10-year Treasury yields inverted, indicating that the difficult state of the US economy.

crypto to the rescue

Hartnett’s note to investors it further says that commodities, cash, and cryptocurrencies “could outperform bonds and stocks.” The BoFA note said that over the last ten weeks, emerging market equity funds saw better market performances as did debt vehicles.

According to the recent BoFA outlook, the bank expects the Federal Reserve to raise the benchmark rate by 50 basis points during the next meeting. Additionally, mortgage rates reached 5% in April. BoFA has also downgraded nine transportation stocks this week, after citing the “deterioration of demand”.

It is worth noting that he is not the only analyst to recently make a comparison between crypto and the stock market. Mike McGlone, analyst at Bloomberg, Said yesterday that cryptocurrencies are ‘getting ahead’ in the ebbing tide of inflation and the low stock market. Furthermore, he said of Bitcoin trades three times the volatility of nasdaq now.

Bank of America and crypto

It is worth noting that in recent months, Bank of America has talked a lot about cryptocurrencies. In February, for example, an analyst noted that Bitcoin it should be seen more as a risky asset than as an inflation hedge, given its volatility. Furthermore, a bank analyst said in January that the market capitalization of the smart contract platform token Solarium could take market share from the current leader ethereum and it could become the “visa” of the crypto ecosystem. Earlier, in December, the bank talked about cryptocurrencies being the currencies of the metaverse.

In July of last year, the bank created a team to investigate cryptocurrencies.

Sources: Reuters, finbold, bitcoin.comarchive

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WARNING: This is an informative article. DiarioBitcoin is a means of communication, it does not promote, endorse or recommend any investment in particular. It is worth noting that investments in crypto assets are not regulated in some countries. May not be suitable for retail investors as the full amount invested could be lost. Check the laws of your country before investing.

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