Michael Hartnett, the chief investment strategist at Bank of America (BOFA), warned that the US economy might go into recession in a recent financial letter to clients. According to a note from a BOFA strategist, cryptocurrencies could outperform bonds and stocks.
Bank of America’s top investment strategist has warned that some economic shocks may hit the US economy. Recently, the Federal Reserve felt compelled to intervene and handle the situation as a result of inflation out of control in the United States.
The Federal Reserve of the United States lifted the benchmark interest rate for the first time since 2018, and the central bank forecasts six more rises this year. Meanwhile, Reuters writes on April 8 that BOFA’s Michael Hartnett believes the macroeconomic situation is deteriorating.
With the macroeconomic situation in shambles, the Fed’s raising rates, and the central bank ceasing large-asset purchases, the BOFA strategist believes the US is on the verge of a recession. “‘Inflation shock’ is worsening, ‘rates shock’ is just getting started, and recession shock’ is on the way,” Hartnett warns.
The BOFA analysts in the United States indicated an approaching economic slowdown, prompting the BOFA analyst’s comments. The margin between 2-year and 10-year Treasury yields narrowed last week, indicating that the US economy may be entering a slump.
Hartnett’s note to customers on Friday also stated that commodities, cash, and cryptocurrencies “may surpass bonds and stocks,” according to Reuters columnist Julien Ponthus. According to the BOFA statement, emerging market equity funds, as well as debt vehicles, did better in the last 10 weeks.
In the previous six months, Bank of America has made a lot of statements about cryptocurrencies. In January, a BOFA analyst forecasted that the smart contract platform token Solana’s market cap would overtake Ethereum as the industry leader.
BOFA stated in December that it sees huge opportunities in the metaverse, and its chief operating officer claimed the month before that he does not see crypto as a competitor. According to BOFA’s current estimate, the Federal Reserve will raise the benchmark rate by 50 basis points at its next meeting.
Furthermore, in April, mortgage rates rose to 5%, making homeownership a little more expensive. BOFA downgraded nine transportation stocks this week, citing “deteriorating demand.” BOFA’s chief operating officer stated the month before that he does not see crypto as a competitor in December, and the financial institution’s president stated the month before that it sees huge opportunities in the metaverse.
The Federal Reserve is expected to raise the benchmark rate by 50 basis points at its next meeting, according to BOFA’s current estimate. In April, mortgage rates increased to 5%, making homeownership a little more expensive. BOFA downgraded nine transportation stocks this week, citing “deteriorating demand.”
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