September 21, 2023

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A popular economist claims that a strong economy is bad news for the US central bank

A popular economist claims that a strong economy is bad news for the US central bank

The famous economist Nouriel “Dr. “Death” Roubini expresses his astonishment that the US economy continues to move strongly, despite the aggressive increases approved by the US Central Bank in interest rates. While other economies are now headed toward recession, this is not yet the case in America. According to Roubini, this is a problem for the US central bank.

A problem for the US central bank

“It is surprising that, given the amount of economic tightening we are seeing, some economies are staying afloat. But the most resilient economy is the US economy.

The eurozone is heading toward a superficial recession, while China represents a structural problem. […] “America is really the star of the show now,” Roubini said.

This is less pleasing for the US central bank, because a growing economy means upward pressure on inflation will continue, and interest rates may have to rise further.

This is also not good news for Bitcoin price.

What does this mean for Bitcoin?

High interest rates are already putting significant pressure on the price of Bitcoin. Not to mention the Federal Reserve (US central bank) raising interest rates above 6.0 percent; It is possible that the puppets are fully dancing.

“It is possible that the US central bank will issue one or two more interest rate hikes. This could lead to a 6 percent interest rate in America. The more that happens, the greater the risk of at least a short and superficial recession,” Roubini said.

For Bitcoin, it is hoped that inflation will decline quickly and central banks will be able to relieve pressure on the economy (and the market). A recession would be bad news, because people would lose their jobs and be forced to sell investments (and thus Bitcoin) to survive.

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