Recent economic indicators from the United States have raised concerns about stagflation, casting a shadow over the market, especially Bitcoin. ELJA, a well-known cryptocurrency trader, revealed some key developments, including disappointing GDP data and a sharp rise in core inflation, indicating a challenging economic environment.
Concerns about stagflation loom
Well-known cryptocurrency trader ELJA said that the US GDP data was significantly lower than expected by 1.6%, highlighting the weakness of the economy. At the same time, the US core personal consumption expenditures (PCE) index soared from 2% to 3.7%, an increase of 85%.
This dual trend of weak growth and rising inflation is a classic hallmark of stagflation, a situation in which economic growth is slow and prices are rising.
However, concerns about stagflation present a unique challenge for the Federal Reserve, which typically cuts interest rates to stimulate growth during economic downturns.
Mainly, during periods of rising inflation, the Fed raises interest rates to curb price increases. However, in stagflation, where both conditions exist simultaneously, monetary policymakers find themselves in a dangerous position.
Bitcoin may face a sell-off
At the same time, ELJA is similar to periods of stagflation in history, particularly in the 1970s and 1980s, when stock markets experienced sharp declines. If history repeats itself, cryptocurrencies like Bitcoin, which are often influenced by traditional market movements during periods of turmoil, could face greater selling pressure.
Key upcoming events: Federal Open Market Committee (FOMC) meeting
The upcoming Federal Open Market Committee (FOMC) meeting, scheduled to take place in four days, is of vital importance as it will determine the direction of monetary policy in the near term. The decisions taken during this meeting could have a profound impact on the markets in the coming months.
As enthusiasts await the outcome of the Federal Open Market Committee meeting, the cryptocurrency market remains on edge, keeping a close eye on economic indicators and developments that could impact sentiment and asset prices.
(Personal opinion, not a recommendation)
In the crypto industry, if you want to seize the next bull market opportunity, you need to have a high-quality circle. If you are alone, looking around and finding no one, it is actually very difficult to persist in this industry. Follow the homepage~
If you like it, please follow us for more articles.
Thanks for reading! See you next time!
