Negative FOMC Minutes
The minutes of the last interest rate meeting of the Federal Reserve are difficult to call positive. Several policymakers at the US central bank indicate that they see economic growth slowing. That in itself is positive for investors who hope that the Federal Reserve will slow down a bit, were it not for the fact that there was also a lot of data to contradict that.
What about the strong labor market that ensures that inflation remains at a higher than desired level. Furthermore, the officials believe that the chance of a sharp recession remains real. So it is still far from certain what the Federal Reserve will do in the coming months and what we can expect for the markets. There is simply a lot of uncertainty right now.
Little perspective on bull market
Although the Bitcoin price is doing well at the moment and the halving is approaching, there seems to be little prospect of a new bull market based on the macroeconomic conditions. Firstly, because a recession may be imminent, which generally does not have a positive effect on risk assets. But even if the US economy manages to avoid a recession, we will have to make do with higher interest rates for a longer period of time.
Higher interest rates mean that investors are trapping more money in US Treasuries. The United States has a monopoly on the US dollar, so it pays out that return anyway. In that respect, it is about a certain return of around 5 percent, compared to the uncertainty of Bitcoin. Many investors then opt for the relative safety of government bonds.