𝗧𝗵𝗶𝘀 𝗢𝗻𝗲 𝗧𝗵𝗶𝗻𝗴 𝗖𝗼𝘂𝗹𝗱 𝗖𝗿𝗮𝘀𝗵 𝗕𝗶𝘁𝗰𝗼𝗶𝗻 𝗔𝗻𝗱 𝗖𝗿𝘆𝗽𝘁𝗼 𝗜𝗻 𝗧𝗵𝗲 𝗖𝗼𝗺𝗶𝗻𝗴 𝗠𝗼𝗻𝘁𝗵𝘀
Reason 👇
◾ Fear of stagflation
Recently, US GDP data came in at 1.6%, which was almost 40% less than expectations.
On the other hand, US core PCE rose from 2% to 3.7% (an almost 85% increase).
This indicates a weakening economy with rising inflation, also called stagflation.
Why is it bad?
During a weakening economy, the FED usually makes rate cuts to boost the economy.
During rising inflation, the FED usually does rate hikes to control the inflation.
But right now, the FED is clueless, as both things are happening at the same time.
During the stagflation era of 1970–80, stocks were one of the worst performers.
Given that crypto usually follows stocks, if the stock market takes a big hit, Bitcoin and crypto will dump even more.
The next FOMC meeting is in 4 days, which will decide the fate of the market in the coming months.
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