The American economy could shrink at its fastest rate since the locking of COVID-19, according to the GDPNOW model of the Federal Bank of the Reserve of the reserve, which now provides for the gross domestic product of America to a drop of 2.8% in the first quarter.
The new forecasts differ enormously compared to only a month ago, which estimated that American GDP followed almost a growth of 4% for the first quarter.
Although GDP trackers like the Federal Reserve Bank of Atlanta can be volatile, several economic indicators also support the downward trend, which could also solve the problems for cryptographic markets, if a global crunch of liquidity and a more geopolitical conflict are followed.
The possible drop in GDP could trigger the start of a recession inflicted by Trump, or “Trump ceases”, as some call it. America’s GDP has not decreased by more than 2.8% since the second quarter of 2020, where it fell by 32.9% while the world was blocked by the Cavid-19 pandemic.
Change the GDPNOW estimates of the Atlanta Fed in the first quarter. Source: Federal Bank of the Atlanta Reserve
The estimated fall may have been provided by the record trade deficit of US $ 153 billion in January, said on February 28. The increase in the 25.6% trade deficit compared to December is probably following companies loading companies before President Donald Trump implemented his first cycle of prices.
A Conference Board’s February 25 survey showed that the consumer confidence index increased from 105.3 points to 98.3 in February – the largest fall from one month to the other since August 2021.
Consumer spending also dropped by 0.2% in January – although only 11 days occurred under Trump – while investor and billionaire Warren Buffett would have estimated that Trump prices could supply more inflation and injure consumers.
Macroeconomic concerns have been charged for the recent collapse of cryptography prices, which has Bitcoin (BTC) and ether (ETH) down 10.2% and 21.6% in the last two weeks.
Despite Trump’s promise to make America the “cryptographic capital” of the world – in part by forming a cryptographic strategic reserve – more than 670 billion dollars have been razed by the market capitalization of the total crypto since its inauguration on January 20.
In relation: Trump’s crypto reserve plan faces the Congress vote, can limit the rally
All GDP models have no dark perspectives like the GDPNOW model of the Atlanta Fed.
The model of the Federal Reserve Bank of New York planned a 2.9% increase for the first quarter during its last update on February 28, while the Tracker GDP of the Dallas Federal Reserve predicted an increase of 2.4% on February 27.
The GDPNOW model nourished by Atlanta imitates the methods used by the Bureau of Economic Analysis to estimate GDP changes, while the New York applies the Bayesian estimate and adopts filtering techniques to assess a wider range of data.
The Federal Reserve of Dallas puts more emphasis on data at the level of the State to collect a more localized perspective on the way in which economic growth is followed.
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