Market Turmoil Signals Looming Economic Crisis

Fears of a significant crash in U.S. stock markets have resurfaced as futures markets witness sharp declines. Investors are increasingly worried that a collapse akin to the “Black Monday” of 1987 may be imminent. The rising yields on 10-year Treasury bonds, which have reached 4.4%, and 30-year yields surpassing 5% have added to market tensions. The introduction of new tariff measures by U.S. President Donald Trump has further escalated panic in financial markets.

Impact of Bond Sales, Gold Purchases, and the U.S. Dollar

China’s rumored sale of $50 billion in U.S. Treasury bonds has created shockwaves in already sensitive markets. This move is thought to be part of China’s economic pressure strategy against the U.S. Concurrently, China’s rapid increase in gold purchases and efforts to reduce reliance on the U.S. dollar have drawn attention.

Goldman Sachs analysts note that foreign interest in U.S. assets is declining. Many countries are reportedly implementing active strategies to reduce their dependence on the dollar. These developments could potentially weaken the United States’ position as a global economic powerhouse.

Schiff: Black Monday May Come Without Rate Cuts

Renowned economist Peter Schiff, known for his skepticism towards cryptocurrencies, argues that the bond market’s decline poses a greater threat than that in the stock market. He warns that if the Federal Reserve does not implement immediate rate cuts or introduce a new quantitative easing program, markets could face a significant crash similar to that of 1987. Schiff believes Trump’s attempts to lower rates by increasing tariffs might backfire, potentially inducing a recession.

Schiff also cautions that without a swift reversal of the new tariffs, the U.S. could face an economic crisis even more severe than in 2008.

Arthur Hayes, the founder of BitMEX, stated that the MOVE Index, which measures bond market volatility, reaching 139.88 signals a call for Fed intervention. ZeroHedge described the current situation as “a truly magnificent collapse.”

Fed Uncertainty and Its Effects on the Crypto Market

The Fed’s potential intervention could impact not only the stock and bond markets but also the cryptocurrency market directly. According to CME FedWatch Tool data, expectations for a rate cut in May surged from 10.6% to 58.9% within a week. Markets are closely watching whether the Fed will convene for an emergency meeting.

If the Fed decides to cut rates, this move could trigger a strong recovery rally in the Bitcoin $104,693 and altcoin markets. However, if the Fed remains inactive, both stocks and cryptocurrencies may face new waves of declines. Currently, Bitcoin trades at $76,367, having lost over 3% in the last 24 hours, while Ethereum $2,511 and XRP have experienced declines of over 7% and 5%, respectively, alongside drops of 3% to 4% in Solana $154 and Cardano $0.671072.