US economy enters a technical recession. Bitcoin volatility

For the April–June 2022 GDP of the United States shrank by 0.9% from the first quarter. With the drop of 1.6% in January–March, the economy entered a period of technical recession.

Analysts on average had expected growth of 0.5%.

The data published on July 28 by the U.S. Department of Commerce will be revised twice over the following two months.

On the eve of the release, Fed Chair Jerome Powell urged not to attach too much weight to the forthcoming macro data release.

“I don’t think the United States is currently in a recession. The reason is that too many areas of the economy are performing too well. We tend to be skeptical of early GDP reports,” he explained.

The Fed chair emphasised that after September, subsequent steps by monetary authorities regarding rate increases will depend on the nature of incoming macroeconomic data.

The initial estimate of US GDP for the second quarter, combined with Powell’s remarks, lowered the odds of aggressive policy tightening at the next meeting. A 0.5 percentage point move is now priced in at 76%, versus 60.5% a day earlier.

Trading on Wall Street opened in negative territory. The S&P 500 is down 0.54%.

A negative performance in equities dampened optimism in the cryptocurrency market. Bitcoin prices eased back from intraday highs above $23,200.

Earlier, Grayscale analysts anticipated the end of the crypto-winter by the end of March 2023.

Earlier, former Goldman Sachs executive and macro investor Raul Pal predicted a turnaround for Bitcoin due to rising global liquidity.

For details on how the Fed’s rate decision affects Bitcoin’s price, see ForkLog’s educational cards.

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