The White House raises its forecast for U.S. economic growth and inflation in 2024, and the Bitcoin market may face new challenges
Recently, the White House officially raised its forecast for U.S. economic growth and inflation in 2024. This move not only revealed the future direction of the U.S. economy, but also heralded a new round of challenges that global financial markets, including the Bitcoin market, may face. The latest forecast from the U.S. Office of Management and Budget (OMB) shows that the U.S. gross domestic product (GDP) growth rate in the fourth quarter will reach 1.9% year-on-year, significantly higher than the 1.3% forecast in March. At the same time, the year-on-year growth rate of the Consumer Price Index (CPI) was also revised up from the original 2.5% to 3.1%, showing that inflationary pressure has intensified.
The Biden administration released the above forecast in OMB's mid-term budget review and continued to emphasize that the United States will face huge budget deficits in the next few years. Specifically, the deficit for the current fiscal year (fiscal 2024, which ends in September) is expected to be $1.87 trillion, which is basically the same as the $1.86 trillion forecast in March; while the deficit in fiscal 2025 is expected to reach $1.88 trillion , higher than the previous forecast of $1.78 trillion. This series of data shows that while the U.S. economy is growing, it is also facing greater fiscal pressure.
For the Bitcoin market, the upward revision in U.S. economic growth and inflation expectations may have a dual impact. On the one hand, economic growth may attract more funds into risky asset markets, including cryptocurrencies such as Bitcoin, thereby driving up their prices. However, on the other hand, intensifying inflationary pressures and widening budget deficits may also trigger market concerns about tightening monetary policy, causing capital to flow back into traditional safe-haven assets, putting pressure on high-risk assets such as Bitcoin.
Therefore, Bitcoin investors need to pay close attention to changes in U.S. economic data and the monetary policy trends of central banks such as the Federal Reserve in order to promptly adjust investment strategies to deal with potential market risks.
