Türkçe
Español
On April 9th, the cryptocurrency markets experienced a significant downturn, along with the announcement of a 104% tariff by China, coupled with an additional 50% tax. Furthermore, the U.S. Treasury Department blacklisted more American companies, while the Treasury Secretary warned of severe economic repercussions ahead. This situation raises questions about the current state of the economy.
Statements from JPMorgan and the Treasury Secretary
The U.S. Treasury Secretary stated that Wall Street has prospered for 40 years, and now it is time for Main Street to benefit over the next four years. The stock market’s losses do not seem to concern him, a sentiment echoed by Trump. As Japan and Canada strengthen their ties, the EU hints at improving relations with China, suggesting that the U.S.’s aggressive stance may push countries closer to alliances outside its influence.
Jamie Dimon, CEO of JPMorgan Chase, recently indicated that potential outcomes of the tariffs could lead to a recession. He urged the Federal Reserve to cut interest rates, with Apollo’s CEO, Rowan, expressing similar expectations for the Fed’s intervention.
“Markets are not always right, but sometimes they are. I believe they are right this time because they are pricing in macro-level uncertainties and micro-level uncertainties at real company levels.”
Japan and the G7 presidency of Canada have agreed to work closely to maintain stability in global markets and financial systems.
What’s Happening in the Economy?
Current conditions suggest that, with the Fed remaining passive, cryptocurrencies may face further declines. In just three days, the 10-Year Treasury Yield rose by 60 basis points, while the S&P 500 dropped by 8%. This marks the largest three-day increase since 1982 and indicates one of the most significant divergences in history.
The Kobeissi Letter noted that something disrupted the markets last night. Between 7 PM and midnight, the 10-year bond yield rose by another 25 basis points. This unusual price movement signals underlying issues within the market.
“The current forecasts indicate that Basis trade is very large, around $800 billion. The key point is that these positions are highly leveraged long positions.”
We are not just discussing an $800 billion valuation; we are speaking of $800 billion in cash. The Fed will inevitably have to intervene with interest rates. If they delay in balancing rates, mere interest rate cuts will not suffice, pushing towards rapid monetary expansion. As of now, the market’s expectation for rate cuts in May has surged to nearly 60%.
The upcoming statements from the Fed will be crucial. We may witness much larger volatility in cryptocurrencies in the short term, likely trending downward as U.S. officials appear increasingly erratic. Bessent remarked on Spain’s commentary about closer ties with China being tantamount to ‘cutting its own throat.’
“The risk of inflation expectations becoming unanchored seems to have notably increased.”
