'Worst Outcome' – JPMorgan CEO Stark Issues US Dollar Fed Inflation Warning As Bitcoin Price Suddenly Drops Below $60,000

Bitcoin
Bitcoin
Having jumped over the past 24 hours, the price of Bitcoin crashed below $60,000 as the market braced for an “inevitable” Bitcoin price crash.

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Bitcoin prices have swung between highs of $65,000 and lows of $50,000 in the past month, with the world's largest asset manager BlackRock issuing a severe volatility warning.

Now, with Tesla billionaire Elon Musk expressing fears of a “total collapse” of the US dollar, Wall Street giant JPMorgan chief executive Jamie Dimon has warned the Federal Reserve that the US dollar is not yet “out of the woods”.

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“I would say the worst outcome is stagnation-recession, high inflation … I wouldn't take that off the table,” Dimon told a fall conference of the Council of Institutional Investors in New York. CNBC.

Stagflation is the name given by economists to an economy affected by both high and low growth rates and is generally considered a difficult economic situation to recover from.

According to Dimon, inflationary forces such as higher deficits that add to the growing US debt of $35 trillion and increased infrastructure spending will put pressure on the US economy.

“They're all inflationary, basically in the short term, the next few years,” Dimon said. “So, it's hard to see [it] And says, 'Well, no, we're out of the woods.' I don't think so.”

Dimon's Inflation Warning Elon Musk warns of interest payments on the massive US national debt pile after sharing $36 trillion “by the end of 2024”.

Bitcoin prices rose sharply last month as the Federal Reserve prepared markets for its first interest rate cut in the post-pandemic era, with traders overwhelmingly betting on a 25 basis point or 50 basis point rate cut. .

“The key focus for investors this week is the scale of the Federal Reserve's interest rate cuts,” Russ Mold, investment director at brokerage AJ Bell, said in emailed comments.

“The quarter would see a percentage point increase as the Fed embarks on a 'softly, gradually' path to easing monetary policy in light of concerns about a weak jobs market. However, traders are increasingly focused on a bigger cut, with a half-percentage point at the meeting at 59%. points reduction.”

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While the Fed is widely expected to signal a new cycle of potentially cheap borrowing and fresh liquidity when officials gather for a two-day policy meeting on Sept. 17, weaker-than-expected U.S. jobs data has fueled fears that the Federal Reserve awaits. Interest rates are too long to cut and can throw the economy into recession.

“There have been suggestions that the Fed has been too slow to act, but it walks a fine line in playing catch-up and going too hard with rate cuts,” Mold added.

“A half-percentage point cut would show that it's serious about making things easier for consumers and businesses, hoping they spend more money. However, that some investors might take such a step could be a signal that the Fed is really concerned. So is the state of the economy, the Fed It's hard to predict with confidence how the market will react if a half-percentage point cut is made.”

Traders expect this week's Fed meeting to start a series of interest rate cuts, with investors betting on cuts through the end of the year.

“The first Fed rate cut may not be the deepest yet, but the central bank will likely signal a faster willingness to move toward a neutral policy stance, which could include a 50 basis point rate cut before the end of the year,” analysts with venture capital firm Tagus Capital emailed. The previous Fed interest rate cut was a bullish indicator for Bitcoin price and the broader crypto market, Kara wrote in comments.

“Overall, this could lead to a recovery in US dollar liquidity, and historically digital asset cycles closely follow such liquidity cycles.”