In a financial note, Michael Hartnett, a strategist at Bank of America, spoke to clients about a dark picture in the United States with the shock of an economic recession.
Bank of America (BofA) chief investment strategist Michael Hartnett detailed that the US economy could face an economic decline. The BofA expert expressed that digital assets could outmatch bonds and stocks.
The expert expressed that the US economy could have a crucial economic lousy time. Recently, inflation rates in the United States of America have reached high levels, and the Federal Reserve (FED) has needed to intervene and handle the issue.
The US Federal Reserve uplifted the standard bank rate in March, with the central bank counting on six more hikes this year. Reuters also revealed that Harnett warns that the macroeconomic panorama is getting harsher.
The specialist highlighted that the decay could start a recession in the United States of America. The Federal Reserve works hard to cool four-decade high inflation by strengthening its rules, and investors might receive a 50 basis point increase in the interest rate.
An Imminent Recession
With the macroeconomic environment facing a hard time, the Fed increasing rates, and the central bank cutting back on large asset purchases, the BofA specialist explained that the US economy could face a recession.
The BofA analyst’s mentioned following US bond markets and highlighted that an economic downturn is a forecast. This event occurred when the spread between the 2-year and 10-year Treasury yields suffered an inversion, revealing the problematic state of the US economic structure.
Digital Assets Would Save the Day
Hartnett’s note to investors further says that articles, cash, and crypto could easily outmatch bonds and stocks. The BofA note highlighted that the new market equity funds experienced more friendly market performances over the last ten weeks.
Following the recent BoFA interpretation, the bank needs the Federal Reserve to elevate the standard rate by 50 basis points for the meetings to come. Additionally, mortgage rates approached 5% in April. BofA has also reduced nine transportation stocks after revealing a decay in demand.
This expert is not the only analyst to recently compare crypto and the stock market. An analyst working for Bloomberg, Mike McGlone, highlighted that digital assets are “getting ahead” in the decreasing wave of inflation and a low stock market.
Bank of America and Digital Currencies
During the last few months, Bank of America opened up a lot about digital assets. In February, an expert expressed that Bitcoin should get labeled more like a risky asset than an inflation hedge, given its sudden volatility.
Another Bank expert stated in January that Solana could take market share from the current leader Ethereum and become the “visa” of the crypto environment. Earlier in December, the bank talked about digital assets being the currencies of the metaverse.
By: Jenson Nuñez
