JPMorgan urges selling cryptocurrencies because of the risk of recession in the US

The bank holding company’s chief global strategist is concerned that the Fed intends to keep raising interest rates

01.09.2022 - 11:25

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What’s new? David Kelly, the chief global strategist at JPMorgan, a financial holding company, said that there is a high risk of a recession in the United States and increased volatility in markets, including cryptocurrency markets. In an interview with Bloomberg, he recommended “steering clear” of bitcoin and large-cap tech stocks. Kelly also advised starting to sell cryptocurrency. However, the analyst noted that by the end of 2023, the economy “will feel more normal.”

Bloomberg’s material

Economic situation in the United States. Kelly’s comments came after US Federal Reserve System (Fed) Chair Jerome Powell spoke at the regulator’s annual meeting. Powell said that the Fed’s main goal is to bring inflation down to 2%, so it has no plans to cut interest rates in the short term. In June, annual inflation hit a 40-year-high, amounting to 9,1%.

“The economy has got one foot into a recession and the other on the banana peel now,” said the chief global strategist.

Last time, on July 27, the Fed raised the interest rate by 75 basis points, its range was 2,25-2,5% per year. The decision was unanimous, with participants at the meeting noting that “a further increase in the target range would be appropriate.”

Kelly also stressed that the Fed is overestimating the strength of the US economy because it “feels guilty about the fact that inflation went up under their watch.”

Earlier, Sam Bankman-Fried, head of cryptocurrency exchange FTX, said that the regulator was the main driver of the downturn in the digital asset market. He explained that raising interest rates to combat high inflation led to a reassessment of risk expectations.

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