Bank of America announces ‘recession shock’

At present, the macroeconomic environment as we have known it almost no longer exists. It is degrading at an astounding rate. And according to the Bank of America (BofA), the worst is to be feared. The institution believes that the US economy could well suffer a shock of recession very soon due to a restrictive monetary policy of the Federal Reserve. However, the situation is quite different with cryptocurrencies.

Cryptocurrencies remained safe and sound despite the crisis

Throughout the world, the financial market, seen as a whole, is subject to change due to major geopolitical upheavals that characterize world news. But meanwhile, in the cryptocurrency market, major digital assets have remained largely unscathed.

As a result, business organizations and pundits are beginning to think digital assets are a stronger market than traditional asset classes. In particular, they compare these assets to stocks. Thus, cryptocurrencies seem to have the potential to support investors and give them the opportunity to generate income.

In a particularly difficult environment for people who only invest in traditional equities, things could complicate more. It might be time to trust digital currencies. Indeed, according to an expert from the Bank of America (BofA), cash, commodities and cryptocurrencies could have superior performance to those of stocks and bonds.

Tough times ahead for the US economy

Michael Hartnett, the Bank of America’s chief investment strategist gave his take on the current downturn in the macro picture. He spoke in a weekly research note for the organization’s clients, as highlighted Reuters April 8.

In this official note, he clarified what had begun to be sensed: “The shock of inflation is getting worse”. He did not mince his words. According to him, there is “a worsening inflation shock, a rate shock that is just beginning and a recession shock that is coming”. In short, according to him, the deterioration of the macroeconomic situation could cause a US recession shock. This situation is all the more alarming since for four decades the FED has been trying to cool high inflation by tightening this policy.

The Bank of America (BofA) has announced that the days ahead could be particularly difficult for investors in traditional assets. Michael Hartnett, a banking professional, indicated that “the shock of inflation (risk) to worsen”.

Source: Finbold

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