JPMorgan Predicts US Recession. Will Crypto be the answer?

Banking giants JPMorgan Chase & Co. who are worth 362 billion USD, has predicted that the economy of USA has a 60 per cent chance of hitting the next recession by 2020. On this issue, Bloomberg reported,

“The probability of a U.S. recession within one year is almost 28 per cent, and rises to more than 60 per cent over the next two years, researchers wrote in a note this week. Over the next three years, the odds are higher than 80 percent, according to the note.”

However, the Federal Reserve Bank of New York, however, predicts that there is a mere 14.5 per cent of a recession by the end of 2019, which is a long way off from the prediction provided by JPMorgan. This is because JPMorgan uses an extremely intricate model to track almost every indicator, that could be a contributory feature to affect the global economy. These include compensation growth, consumer and business sentiment, and labour participation.

Chief Economist at Amherst Pierpont, Stephen Stanley also reiterated the same idea saying that a recession was to surely come in the near future in spite of USA’s current robust and bullish market, though maybe not as prematurely as 2020. In fact, a vast majority of economists are forewarning that a recession will hit the US Market, in the next two to three years, a probable cause of which can be trade issues.

David Altig, the research director of the Federal Reserve Bank of Atlanta and NABE’s survey chair, also resonated the same views and said “Trade issues are influencing panelists’ views,” and stated the high-interest rates as imposed by the federal government is also leaving the US market vulnerable to a mid-term crash.

These predictions and a general sense of doubt about the US market’s stability has resulted in the rise in the demand for cryptocurrency. Many financial institutions have already established the infrastructure in order to target institutional investors who are planning to invest in digital assets. investors from the traditional finance sector are also looking to invest in cryptocurrencies, which has emerged as a huge trend, recently.

Jim Hamel, a portfolio manager at Artisan Global Opportunities Fund, said,

“There are a number of tailwinds contributing to this trend. First, we’re seeing rapid growth in e-commerce, which requires that customers be able to make secure digital payments. The growth in cross-border transactions and the general impact of an increasingly globalized marketplace are helping accelerate this trend.”