Analysis: Macro data makes US recession this year a “base case”, Bitcoin expected to rise

Odaily News Bitcoin is expected to benefit if the US recession becomes the "baseline scenario expectation". Multiple sources are pessimistic about the US economy and the Federal Reserve. The Kobeissi Letter, a trading information platform, pointed out that the US GDP growth rate unexpectedly turned negative in the first quarter, and the trade tariff policy may exacerbate inflation, which puts the Federal Reserve in a dilemma. It must choose between curbing inflation and unemployment, and the extent and timing of interest rate cuts are key. Failure to cut interest rates will weaken GDP and increase unemployment, while an immediate interest rate cut may cause inflation to rebound. The Federal Reserve faces the dual threats of stagflation and full-scale recession.
Kobeissi said that a U.S. recession has become the baseline expectation. The Chicago Mercantile Exchange's FedWatch tool shows that the market's expectations for the Fed's policies are conservative and unlikely to change significantly before 2025. The market believes that the FOMC may cut interest rates by 0.25% at its June meeting, and the possibility in May is only 3%. Crypto market participants are weighing the direction of the Fed's policies. Well-known trader Skew said that the probability of a rate cut has increased, the situation is urgent, and the Fed is more concerned about economic weakness. Crypto trader Michaël van de Poppe believes that the increase in rumors of a recession will strengthen the Fed's argument for easing policy, when market liquidity will increase and risk appetite may increase. (Cointelegraph)