Bank of America Strategists Warned, “Recession Shock Is On The Way”

Bank of America strategists warned, "Recession shock is on the way, cryptocurrencies are gaining importance."

Bank of America strategists, in their weekly research note, argued that the macro-economic picture is deteriorating rapidly, which may push the US economy into recession while the Fed tightens its monetary policy to rein in rising inflation. "The inflation shock' is getting worse, the 'rate shock' is just getting started, the 'recession shock' is coming," said Michael Hartnett, BofA chief investment strategist. He added that in this context, cash, commodities and cryptocurrencies could outperform bonds and stocks. With the Fed minutes released on Wednesday, the plan to shrink the balance sheet, which is approaching $ 9 trillion, is expected to be approved at the May meeting. On the other hand, the majority of investors are of the opinion that the interest rate will be increased by 50 basis points. BofA strategists are not alone in that the monetary tightening in 2022 could positively reflect on the cryptocurrency. For example, Mike McGlone, chief commodity strategist at Bloomberg, said in a recent comment, he said, “In 2022, many assets will be under the influence of strong deflationary policies due to the excesses of 2021. However, with the maturation of the global digital collateral feature, Bitcoin will stand out in a way that will distinguish itself from the others in this sense.”