Data from the US Commerce Department suggests America has entered a technical recession, but market analysts have highlighted key metrics that suggest investors are optimistic.
The U.S. economy contracted for the second straight quarter, government data shows published Thursday, meeting the criteria for a technical recession. The Biden administration argues that the United States is not in a recession, pointing to low unemployment rates and other measures that contradict the argument.
Mati Greenspan, founder and CEO of Quantum Economics, addressed the subject in his latest QE newsletter, noting a paradoxical effect between falling GDP and a surge in stocks and other risky assets.
He attributed the decision to the US Federal Reserve’s decision to raise interest rates by 0.75%, which cryptocurrency markets outperform stockswith ether (ETH) jumping 5% immediately after the announcement.
Greenspan admitted that the current unemployment rate was “extremely low” compared to other periods of recession, but was not convinced that this was enough to prove that the US economy has not shrunk:
“For a president to insist that there is no recession when the technical definition is met makes political sense. Better to allow people to argue the semantics than to admit that you made the economy shrink.
Anthony Pompliano also addressed the release of the second quarter GDP figure for the US economy in his daily bulletin, calling the government’s comment on the technical definition of a recession “gaslighting”, given the unique circumstances. economic measures:
“This recession is interesting because it is not accompanied by high unemployment or a significant drop in consumer spending, but it is undeniable that GDP is falling and that the Federal Reserve is successfully achieving its objective of destroying demand. .”
Other prominent market analysts like Cointelegraph contributor Michaël van de Poppe as well highlighted the apparent disparity between the US government and Federal Reserve Chairman Jerome Powell’s insistence that the US economy was not in recession.
BREAKING: While Powell said the US is not in a recession, the GDP numbers have given two consecutive quarters of negative growth which means the US is in a recession!
— Michael van de Poppe (@CryptoMichNL) July 28, 2022
The latest rate hikes by the US Federal Reserve continue to be cited by market analysts as a key driver for a further rally in risky assets like the gold and cryptocurrency markets.