Raise interest rates again in order to control the high inflation.
In the midst of the Fed's aggressive stance, JPMorgan recommends investors to focus on values rather than short-term direction.
Last Friday, Fed Chairman Jerome Powell stated unequivocally that he intends to raise interest rates and keep them high for an extended period of time. This signals the end of market free money and strict quantitative tightening measures. Many analysts believe that the Fed's aggressive stance will lead to a recession in the United States.
JPMorgan Asset Management’s chief global strategist David Kelly said that investors should focus more on values and avoid volatile assets such as cryptocurrency. He added:
“The economy is currently in a recession with one foot on the banana peel. Given this context, the best approach to position yourself today is to examine values. Make sure to choose the US and overseas value equities, as well as firms with a low price-to-earnings ratio.”
Sell Crypto Says JPMorgan
As per JPMorgan's global strategist David Kelly, value stocks will reclaim center stage. He also stated that investors should avoid growth stocks at this time. Kelly urges investors to avoid large-cap tech stocks while dumping Bitcoin and cryptocurrency.
This year has been a roller coaster ride for BTC and the larger cryptocurrency industry. Especially, the overleverage in the cryptocurrency market, combined with a liquidity problem, caused a sharp correction in the second quarter.
Bitcoin and the broader crypto market gained traction starting in July, but the market has experienced a significant pullback after the Fed's statements. Kelly anticipates more volatility while predicting a high likelihood of a recession.
He anticipates that the economy would rebound to normal by the end of 2023. The Federal Reserve is overestimating the strength of the US economy because it feels bad about inflation rising under their watch, he claims.
As CoinGabbar earlier reported that the Fed's pronouncements have had a significant impact on the price of cryptocurrencies over the last 3-4 months. Last week Fed cleared its intention to raise interest rates again, and this statement affected the prices of the broader cryptocurrency market, but at the time of writing the market gained some bullish momentum.
Read also: Bitcoin Price Tests Monthly Lows Around $19,500; Has Market Found Bottom?
