Economists Contradicts With Executives On US Recession, Bitcoin Nears $60K

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As a seasoned crypto investor with a decade of market insights under my belt, I find myself navigating these turbulent economic waters with a mix of caution and opportunity. Having weathered multiple bull and bear markets, I’ve learned to read between the lines of optimistic CEOs and pessimistic economists.

According to several well-known economists, there’s a strong possibility that the United States has entered a recession despite claims by numerous CEOs and business leaders suggesting otherwise. Intriguingly, JPMorgan Chase, one of the major players on Wall Street, forecasted an uptick in the likelihood of a U.S. recession towards year-end, causing apprehension among investors.

Economists Say the United States May Be In Recession

Recently, the most current unemployment figures offered a glimmer of hope to both the stock and cryptocurrency markets, but apprehensions about an economic downturn in the U.S. remain prevalent. In the past few hours, the prices of Bitcoin and Ethereum have risen by 7% and 6% respectively, indicating a growing trend towards increased value after their recent decline.

In my analysis, I found that the number of new unemployment claims surprisingly decreased more than anticipated during the week ending on August 3. To be specific, the number of individuals claiming benefits in the United States dropped by approximately 7,000 to a level of 233,000, which is below the projected figure of 240,000. This suggests that the labor market may be improving at a faster pace than initially anticipated.

Economist David Rosenberg, during his conversation with Bloomberg, expressed that we may already be in a recession or on the verge of confirming one. Despite the unexpected decrease in the number of initial jobless claims, his primary worry lies in the swift rise in the overall unemployment rate.

The ideas proposed by Rosenberg are echoed by Claudia Sahm, a previous Federal Reserve economist, as she stated, “Although the United States isn’t technically in a recession, we’re dangerously close to one.”

It is incredible that I continue to read and hear how the rise in the unemployment rate is due to booming immigration. Nary a word that all this has done is act as an antidote to the fact that the native-born U.S. population has dropped -0.3% over the year to July. Total…

— David Rosenberg (@EconguyRosie) August 8, 2024

Contrary to some concerns, as a crypto investor, I see that leading U.S. business heads like Roland Busch, CEO of Siemens, and Hugh Johnston, Disney’s CFO, are expressing optimism about the U.S. economy. Mr. Busch mentioned that the market is somewhat subdued due to the upcoming US election, but he remains hopeful. Similarly, Mr. Johnston believes that the economy will regain strength, encouraging consumers to return.

JPMorgan Warns About Peak in Fourth Quarter

As an analyst, I’ve recently observed a shift in the economic outlook from JPMorgan. They’ve bumped up the likelihood of a US recession to 35%, an increase from the initial 25% at the start of last month. In contrast to their earlier 50-50 prediction two months ago, they now only see a 30% chance that the Federal Reserve and other central banks will maintain “high-for-long” interest rates. Notably, JPMorgan is anticipating that the U.S. Federal Reserve will lower rates by half a percentage point in both September and November.

The CME FedWatch indicator predicts a approximately 57.5% likelihood of a 0.5 percentage point interest rate decrease in September and about a 47.5% chance of the same reduction in December. Meanwhile, the Bank of Japan has postponed its intentions for an interest rate increase because of market volatility, leading to increased cautious investment.

Today’s high for Bitcoin reached an impressive $59,726, marking a 7% increase over the past 24 hours. This substantial growth suggests that the recent buying activity might be spearheaded by institutional investors. Interestingly, while retail investors were offloading their holdings during the recent market downturn, institutional investors appeared to take advantage of the dip by increasing their investments.

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2024-08-08 20:11