Yesterday (July 28), the US Department of Commerce released new quarterly figures for the gross domestic product (GDP) of the United States. This showed that the US economy is contracting further and that GDP has fallen further by 0.9% in the second quarter of 2022.
There was a lot of attention for the announcement because negative figures were already published in the first quarter of this year. Then a GDP reduction of -1.6% was presented. After the release of the quarterly results, US President Joe Biden commented.
According to economists An economic recession is defined as two consecutive quarters of negative GDP growth. By this definition, the United States is now officially in a recession. After announcing the numbers, President Biden gave a speech on Thursday to further explain the numbers and had a striking look at the recession.
President Joe Biden Undermines Recession
In Joe Biden’s speech, it was clear that the Biden administration was doing its best to avoid the term recession. US President Joe Biden, in his speech at the White House on Thursday, downplayed the bleak economic report by insisting that it doesn’t “sound like” the US has entered a recession. This is very striking, especially given the official definition that economists have used for years.
The president may want to suppress some panic that could arise when a recession has been officially confirmed. For some time, economists, consumers and businesses have been tense and to expect many of them are in recession. We have seen this reflected in the strong price declines in financial markets last year.
The run-up to the new presidential election is approaching and an economic recession will not improve President Joe Biden’s chances of reelection. The current US president may be trying to do everything he can to avoid a recession and finish his term successfully.
What effect did this have on the crypto market?
After the GDP data announcement, we saw an increase in many stock markets, but also the crypto market, despite the shrinking economy. So rose bitcoin (BTC) striking up to $24,000. A possible explanation for the price increase is the fact that many investors and traders priced in an even greater economic contraction. In the past quarter, for example, we saw the US economy shrink less rapidly than in the previous quarter.
