With this scenario, Kelly recommended against investing in large-cap tech stocks as well as cryptocurrencies including Bitcoin. In fact, he told investors to sell whatever crypto assets they hold.
“Be sure to overweight US and international value, as well as stocks with a relatively low price/earnings ratio”Kelly told Bloomberg. As for when the economy will return to normal, I’m sure it will be next year.
He also left a question in the air “How much damage does the Fed want to inflict on this economy?”. The official warned of the “painful” consequences of the recession for citizens and businesses, such as the restriction of credit and the slowdown in economic activity.
In that sense, Kelly considers that the Federal Reserve is “overestimating the strength of the US economy, as he feels guilty about the fact that inflation rose under his control.”
Regarding the markets, he assured that The greater volatility would be a prelude to the recession of the economy as a result of the rise in interest rates in order to control the rise in prices.
In fact, the price of the main cryptocurrencies depends a lot on the appetite of investors for risk, which means that in this scenario, prices would tend to depreciate.
Source: Ambito
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