Bank of America Strategist Warns 'Recession Shock' Is Coming, Analyst Says Crypto Could Outperform Bonds

Bank of America Strategist Warns ‘Recession Shock’ Is Coming, Analyst Says Crypto Could Beat Bonds – Bitcoin News

On Friday, Michael Hartnett, chief investment analyst at Bank of America (BOFA), explained in a weekly financial note to clients that the US economy could be headed into a recession. A BOFA strategist’s note provided more detail that cryptocurrencies could outperform bonds and stocks.

BOFA Strategist notes that the inflation shock is getting worse, and cryptocurrencies may outperform bonds and stocks

Bank of America’s chief investment analyst warned that the US economy could feel some economic shocks. Recently, inflation has spread in the US and the Federal Reserve has felt the need to step in and manage the problem. On March 16, the US Federal Reserve raised the bank’s benchmark interest rate for the first time since 2018, and the central bank expects six more increases this year. Meanwhile, on April 8, Reuters reported that BOFA’s Michael Hartnett said the macroeconomic situation was getting worse.

With the macroeconomic environment in disarray, the Federal Reserve raising interest rates, and the central bank cutting large asset purchases, the BOFA strategist said the US economy could be headed into a recession. Hartnett insists the “inflation shock” is getting worse, the “price shock” is just beginning, and the recession shock is “coming.” The comments of a BOFA analyst follow the US bond markets in an indication of the expectation of an economic recession. This happened last week when the spread between the two-year and 10-year Treasury yields reversed, indicating that the US economy may be heading into a recession.

Hartnett’s note to investors on Friday also stated that commodities, cash and cryptocurrencies “could outperform bonds and stocks,” according to Reuters author Julian Ponthos. The BOFA note stated that over the past 10 weeks, emerging market equity funds have seen better market performance as have debt compounds. Over the past six months, Bank of America has had a lot to say about cryptocurrencies. For example, a BOFA analyst said in January that the market capitalization of smart contract platform Solana could take market share from the current leader, Ethereum.

Mortgage rates rise, BOFA rating cut to 9 for transfer credits, BOFA Institute says households have more cash on hand

In December, BOFA made it clear that it sees a huge opportunity in the metaverse, and the previous month, the financial institution’s chief operating officer made it clear that he did not see cryptocurrency as a competition. According to BOFA’s latest forecast, the bank expects the Federal Reserve to raise the benchmark interest rate by 50 basis points during the next meeting. Furthermore, mortgage rates hit 5% in April, making home ownership even more expensive. BOFA also downgraded nine transport stocks this week, after citing “deteriorating demand”.

While BOFA’s chief investment analyst explained on Friday that assets such as cash, commodities and cryptocurrencies could do well, Bank of America Institute chief economist David Tinsley said Thursday that people are preparing for inflation with a cash surplus. “On average, a low-income household has about $1,500 more in a savings and checking account than it did before the pandemic,” Tinsley said during an interview with Yahoo Finance Live.

Tags in this story

50 basis points, Bank of America, Bitcoin, Bofa, Bonds, Chief Investment Analyst, Cryptocurrencies, David Tinsley, Economy, Economy, Ethereum, Fed Raising Rates, Home Ownership, Inflation Shock, Michael Hartnett, Recession Shock, Stocks, Treasury yields

What do you think of the BOFA note to investors written by the bank’s chief investment analyst Michael Hartnett? Tell us what you think about it in the comments section below.

Jimmy Redman

Jamie Redman is the head of news at News and a technology financial journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for News about the disruptive protocols emerging today.

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