Analysis: Macroeconomic data makes a U.S. recession this year a 'baseline prediction'; Bitcoin is expected to rise

Bitcoin is expected to benefit under the scenario of a U.S. economic recession becoming the 'baseline expected scenario.' Multiple sources hold a pessimistic view on the U.S. economy and the Federal Reserve. The trading information platform The Kobeissi Letter points out that the U.S. GDP growth rate unexpectedly turned negative in the first quarter, and the trade tariff policy may exacerbate inflation, putting the Federal Reserve in a dilemma. It must choose between curbing inflation and the unemployment rate, making the timing and magnitude of interest rate cuts critical. Not cutting rates would weaken GDP and increase unemployment, while immediately cutting rates could risk a rebound in inflation, leaving the Federal Reserve facing the dual threats of stagflation and a full-blown recession.

Kobeissi states that a U.S. economic recession has become a baseline expectation. The Chicago Mercantile Exchange FedWatch tool indicates that the market has conservative expectations for Federal Reserve policy, with little significant change anticipated before 2025. The market believes that the FOMC meeting in June may cut rates by 0.25%, with only a 3% chance in May. Participants in the crypto market are weighing the direction of Federal Reserve policy; well-known trader Skew states that the probability of a rate cut is rising, and the situation is urgent, with the Federal Reserve becoming more focused on economic weakness. Crypto trader Michaël van de Poppe believes that increasing rumors of a recession will strengthen the argument for the Federal Reserve to loosen its policies, which would increase market liquidity and potentially enhance risk appetite.