In this context, the director general of BlackRock, Larry Fink, sounded a warning bell on the increase in inflation levels due to the policies of American president Donald Trump. This could have an impact on Bitcoin and traditional financial markets.
The CEO of Blackrock warns against the increase in the risk of inflation
Blackrock’s CEO Larry Fink war has warned that Trump’s commercial decisions would increase inflation, hoping that the federal reserve could reduce interest rates. During his speech to Ceraweek, Fink said that nationalist policies in the United States would have an increase in inflation. The CEO of BlackRock expressed doubts about the capacity of the Federal Reserve to reduce rates due to the risk of inflation.
The president of the federal reserve, Jerome Powell, had said previously that the federal reserve was not in any
Hurry to reduce interest rates due to a strong labor market and persistent inflation. The federal reserve is likely to maintain interest rates during its March session, according to the CME Fedwatch tool, although traders remain undecided on a rate decision of May.
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Increasing economic concerns add pressure to the market
In addition, Goldman Sachs economists have raised their probability of American recession over the next year at 20% compared to 15% and have highlighted Trump’s economic policies as a key risk factor, Forbes reported. Yardeni’s search has also revised its probabilities of recession and increased them by 20% to 35% due to concerns concerning the impact of executive decrees, prices and changes in the Trump administration policy.
These fears arise while the latest American inflation data, which will be published this Wednesday, should show an increase in consumer prices in February. According to Bloomberg, the consumer price index (IPC) can reveal the fight of the federal reserve to control inflation and lead to stagflation – a combination of economic decline and inflation.
The cryptography market enters the red zone
The worsening of the macroeconomic environment affects the cryptography market and people are preparing for more volatility. Sean Dawson, the derive.xyz research chief, told Forbes that the slowdown was mainly motivated by economic uncertainty. “While the lowering feeling continues to increase, traders are starting to seek means to cover their losses, especially since market volatility increases in traditional and cryptographic markets,” said Dawson.
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If the global economy will continue to deteriorate in the weeks and months to come to determine the future of digital assets. Everyone is on board, paying particular attention to economic indicators that could influence the future of Bitcoin and the rest of the cryptocurrency market.
FAQ:
- Why does Bitcoin price drop?
Bitcoin price decreases due to economic concerns, in particular fears of inflation, the potential risks of recession and uncertainty concerning interest rate policies of the federal reserve. - Will Bitcoin will soon recover?
The recovery depends on the economic stability, the decisions of the federal reserve and the feeling of the market. If inflation is dashed and interest rates are lowered, Bitcoin can resume strength.
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