The anomaly of non-farm data in May
The new non-farm employment and unemployment rate in the United States in May were in conflict. The data showed that the non-farm employment population increased by 272,000 but the unemployment rate increased to 4%. These two data are indeed incredible, and the market quickly responded to the decline, but there is no need to turn short. After all, it is a bull market and has just been halved. From historical data, Bitcoin has a very strong bull-bear conversion cycle. You can observe the trend after each halving.
From an economic point of view, the rise in unemployment is not a bad thing for interest rate cuts. The interest rate hike cycle of the US dollar after the epidemic has led to a series of consequences: the appreciation of the US dollar, the high cost of employment in the labor market has led to an increase in unemployment and fatigue in the labor market; the increase in loan costs has caused companies to repay higher debts, further increasing company costs.
The size of the U.S. national debt has reached six times that of the 2008 financial crisis. The federal government's fiscal deficit in fiscal year 2023 reached 1.69 trillion U.S. dollars, an increase of 320 billion U.S. dollars from the previous fiscal year, a year-on-year increase of 23%; the average annual proportion of the federal government budget deficit to GDP in the past 40 years was 3.7%, and it rose to 5.3% in 2023. Putting aside the debt, a single huge government deficit will lead to economic growth fatigue, and the government has no extra money to invest in the real industry to stimulate economic growth. Then the interest rate cut will inevitably follow, and now it depends on how long it can last. I personally hope that Trump will take office, after all, he is a businessman; unlike Biden, the market will collapse as soon as the war starts.
Don't think that if it falls, it will be bearish and if it rises, it will be bullish. You must have the ability to think independently. From the macro perspective to what will happen in the near future, look at the long-term.
