The Coronavirus continues to be a hot topic of discussion around the world. Particularly in China and the US, there has been an emphasis on its effect on the economies. The two largest economies have been shaken and the effects are being felt in investor’s wallets. The U.S stock is currently having one of its worst runs. The drop and the continued fear has prompted many to look unto the FED to cut interest rates. Such a move in the near future could see Bitcoin come out soaring.
U.S Is Headed For A Recession
The Coronavirus promises to leave the economy on its knees. Led by market drops, the economy is struggling. And as the markets drop, the chances of an interest rate cut go up. MarketWatch notes that the probability of at least two rate cuts before December is at 78%.
But, it remains too early for the FED to make this call. As analyst The Wolf Of All Streets notes, this would be a dangerous move as the full impact of the Coronavirus is still unknown.
The FED is being pressured to react to the virus, which is dangerous. QE and cuts now before understanding the full breadth of impact could leave them with no dry powder when they need it most. Rate cuts and QE can’t fight a black swan event – they can just take the edge off.
— The Wolf Of All Streets (@scottmelker) February 27, 2020
While this is true and it remains too early to make the cut, it remains a fate that the U.S cannot escape. As the epidemic prolongs, China will remain on lockdown and will continue to affect the American investor and far more consumers.