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Economists Contradicts With Executives On US Recession, Bitcoin Nears $60K

Economist David Rosenberg believes the US recession likely here, opposing executives' views of resilient economy. Bitcoin inches closes to $60k.
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Economists Contradicts With Executives On US Recession, Bitcoin Nears $60K

Highlights

  • Economists believe the United States may be in recession or very close to it.
  • Initial jobless claims dropped more than expected, but economist David Rosenberg sees recession.
  • JPMorgan has raised the odds of US recession to 35%, up from 25% as of the start of last month.

Popular economists believe the United States could already be in recession, contrary to the belief of many CEOs and business leaders that a recession is not coming. Notably, Wall Street giant JPMorgan’s prediction of an increase in the US recession prospects by the end of the year spurred fears in the market. The upcoming jobs reports will become a key factor for the Fed to decide on monetary policy.

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Economists Say the United States May Be In Recession

While the latest initial jobless claims data provided some relief to the stock and crypto market, US recession fears continue to persist. Bitcoin and Ethereum prices witnessed a 7% and 6% jump respectively on August 8, but concerns are increasing ahead jobs and inflation data.

The initial jobless claims fell more than expected for the week ending August 3. People claiming unemployment benefits in the US fell by 7K to 233K below market expectations of 240K.

Economist David Rosenberg in an interview with Bloomberg said “We are either in a recession or about to confirm one.” He thinks despite the weekly initial jobless claims dropping more than expected, the real concern is the rapidly increasing unemployment rate.

Rosenberg’s claims somewhat resonate with former Federal Reserve economist Claudia Sahm who said that “While the US isn’t yet in a recession, it’s uncomfortably close.”

On the contrary, business leaders in the U.S. say they don’t see any signs of recession and the U.S. economy remains resilient. Roland Busch, CEO of Siemens, said the market is a bit muted ahead of the US election. Also, Disney CFO Hugh Johnston thinks the economy will continue to strengthen, bringing back consumers.

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JPMorgan Warns About Peak in Fourth Quarter

Wall Street giant JPMorgan has raised the odds of US recession to 35%, up from 25% as of the start of last month. JPMorgan now sees just a 30% chance of the Federal Reserve and its peers keeping interest rates “high-for-long,” as compared with the earlier 50-50 estimates two months back. JPMorgan predicted that the U.S. Federal Reserve would cut rates by half a percentage point in September and November.

CME FedWatch tool now shows less than 50% chance of a 50 bps rate cut in September after recent market sentiment ahead of US CPI. Currently, the Bank of Japan has pushed back its plans for any rate hike due to market instability, renewing cautious buying in the market. However, it’s still unsure if the central bank will increase interest rate rates next year.

BTC price surpassed $59,500 to an intraday high of $59,726, but now it has dropped back to $58,500. The trading volume is low, indicating that the buying activity is low. Notably, while retail investors were selling their holdings during the crash last week, institutional investors bought the dip.

Also Read: Bitcoin Sees Strong US Buying Pressure Amid US Recession Fears

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Varinder Singh

Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space. At CoinGape Media, Varinder leads the editorial decisions, spearheading the news team to cover latest updates, markets trends and developments within the crypto industry. The company was recognized as Best Crypto Media Company 2024 for high impact and quality reporting. Being a Master of Technology degree holder, analytics thinker, technology enthusiast, Varinder has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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