Time To Get Risky in Crypto? Macro w/ Darius Dale
The economic data and market signals are increasingly pointing towards the likelihood of a "soft landing" for the US economy. Productivity growth has bounced back to healthy levels, taking pressure off companies to keep raising prices. Corporate profitability is also rebounding thanks to the productivity gains. This gives the Fed more latitude to pivot on interest rates without necessarily triggering a recession. Market risk indicators are reflecting this increased probability of a soft landing, with stocks hitting new highs in recent weeks.
However, risks still remain and the outcome is not guaranteed. We are in the typical danger zone for recessions following interest rate hikes. But key real-time economic data like personal income and corporate earnings continue to surprise to the upside. This aligns with historical examples of soft landings when the Fed cut rates quickly and productivity or fiscal spending were strong.
Cryptocurrencies and blockchain stocks have also rallied sharply over the past couple of months. Some of this likely reflects growing institutional adoption and the pending approval of a Bitcoin ETF. However, the impact may be somewhat priced in already. Broader macro forces around liquidity, inflation, and policy still drive a lot of the price action.
The current overbought conditions suggest a near-term pullback is very possible. But medium-term market risk indicators remain bullish. Any dips can be used as buying opportunities as long as the economic data continues supporting the soft landing narrative. The path ahead is positive but bumpy.
Guest: Darius Dale Founder & CEO - 42 Macro 42 Macro website ➜ https://bit.ly/42MacroDD