QCP Capital experts have published a new financial report on the global situation. They noted that the US GDP level in the 1st quarter of 2024 grew by 1.6% against the forecast of 2.5%. At the same time, core PCE YoY was 2.8% versus 2.6%, and PCE YoY was 2.7% versus 2.6%.. Analysts explained how this could affect the global cryptocurrency market. They warned traders against purchasing Bitcoin (BTC).
There are warning signs coming out of the US this week, experts say.. A weak GDP indicates the country's economy is fragile. High core PCE warns of inflation problem. The researchers emphasized that if GDP continues to decline and inflation remains stable, the United States could move into a stagflation scenario.
“At this stage, monetary policy may matter much less than fiscal. The latter will become the main factor for liquidity and asset efficiency,” experts emphasized. They recalled that the US Treasury General Account (TGA) has assets of $1 trillion, after bond issuance and tax revenues in 2024.
Analysts noted that the US government could decide to spend the money, «potentially adding $1 trillion in liquidity to the financial system. We believe that this is a likely scenario ahead of the election of a new president of the country.”
The researchers also reminded that the quarterly refund announcement (QRA) could lead to an increase in the issuance of short-term US notes. Previously, Treasury Secretary Janet Yellen used them to influence short-term interest rates. “There is $1.4 trillion in potential liquidity between TGA and RRP. This could be the main driver of bullish sentiment towards the end of the year.”
Experts highlighted that, looking at major macroeconomic changes and headlines about political conflicts in the past few weeks, funding levels have been slightly subdued. Experts recommended traders to be very careful in the market of risky assets, including Bitcoin.