The US economy is slowly recovering from the post-pandemic plummet. Earlier this month, the Federal Reserve announced that inflation in the US had fallen to 3.1% for January, higher than expectations. While the economy is recovering slowly, fears about a potential recession loom overhead.
According to Morgan Stanley‘s chief US economist, Ellen Zentner, a recession for the US economy is unavoidable. Nonetheless, Zentner highlights that a recession might not hit the US this year.
Also Read: US Inflation Falls to 3.1%
Zentner says, ‘We will have a hard landing at some point. I guarantee you that. Here are these cumulative impacts that build over time, and we are in the camp that we have not seen all of the tightening impacts of monetary policy.‘
The Morgan Stanley economist says we will feel the impact of the financial policy decisions over the next 18 months. Zentner notes that corporate defaults hit a post-pandemic high last year. On the other hand, Federal Reserve data points to bank lending falling.
CPI (Consumer Price Index) continues to hover above the Fed’s 2% target despite falling inflation numbers.
Will the US economy affect Bitcoin’s performance?
Bitcoin (BTC) has seen a sudden price surge over the last week. The asset has reclaimed the $59k level for the first time since 2021, over two years ago. The recent rally has brought almost all BTC holders into profits. The rally could be due to increased institutional money flowing into BTC, especially after the SEC’s (Securities and Exchange Commission) historic approval of 11 spot BT’C ETFs (Exchange Traded Funds).
Also Read: How Russia & Ukraine War Is Boosting US Economy
However, the US economy may impact BTC’s growth over the next few weeks. The Federal Reserve has said it may not reduce interest rates in March. The development could be a barrier to BTC’s price. The Fed will conduct its next meeting on Mar. 12, 2024, and decide whether to continue its current monetary policy or to begin interest rate cuts.
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