The US Federal Reserve (FED) marked the agenda with the statement of President Jerome Powell last week. He openly hinted at a plan to raise interest rates to contain strong inflation. In the midst of such a hawkish stance by the Fed, JPMorgan relayed its latest market forecasts. He advises investors to focus on valuations and ignore the short-term direction. He also shares his advice for Bitcoin and altcoin investors. Here are the details…
JPMorgan strategist: Don’t fall for volatile investments like crypto
Last Friday, Fed Chairman Jerome Powell made it clear that he would raise interest rates and keep them high for an extended period of time. This marks the end of free money in the market and strong quantitative tightening measures. Many analysts expect the Fed’s hawkish stance to lead to a recession in the US. Investors should focus more on valuations and not fall for volatile investments like crypto, said David Kelly, chief global strategist at JPMorgan Asset Management.
One leg of the economy is in recession, the other is about to slip. Given this background, the best way to position now is to look at valuations. Be sure to weigh in on stocks with relatively low P/E as well as US and international value.
JPMorgan says buy “Bitcoin and altcoins”
Value stocks will once again take the stage, according to David Kelly, global strategist at JPMorgan. He added that investors should once again move away from growth stocks at this point. Kelly suggests that big-capital tech stocks should be avoided when advising to sell Bitcoin and crypto. As cryptokoin.com reported, this year has been a serious “rollercoaster” for Bitcoin and the wider crypto market. In particular, the excessive leverage and liquidity crisis in the crypto market led to a serious correction in the second quarter.
Bitcoin and the broader crypto market have gained momentum since July. However, the market saw a sharp pullback after the Fed comment. Kelly expects volatility to continue as he forecasts a high risk of recession. He expects the economy to return to normal by the end of 2023. “The Fed overestimates the strength of the U.S. economy as it is guilty of rising inflation under their watch,” he said.
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