How to navigate this fuzzy macro picture

Bitcoin bull market vs macro winds

War is peace. Freedom is slavery. Ignorance is strength. And bad economic data is bullish for risk assets. 

This is not 1984, this is 2024.

While people think the US economy has recovered from the COVID crisis and the Federal Reserve has achieved a soft landing the truth is that nobody knows.

Could it be that risk assets have been getting ahead of themselves in the last 12 months?

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How to navigate this fuzzy macro picture

The takeaway

The decision of the FOMC meeting last week was to keep rates unchanged. But what else do you want them to do with inflation being so sticky?

The good news is that many things points to weaknesses in the US economy. 

My particular focus is on the job market and especially job openings. Those are falling much below the long term trend. Usually that’s a sign of an economy moving into a recession.

So with the current trend I think we are due for at least a slowdown or even a recession. 

But don’t worry, in the twisted logic of the market this is a good news as it provides a clear path back towards easy monetary conditions.

The worst scenario would be something in between where inflation is going nowhere, the job market somehow remains strong and risk assets are in  a perpetual state of uncertainty. If we get stuck in there the Bitcoin bull market will be sailing against the macro wind. We don’t want that.

The US economy is not as strong as it looks