Mike Novogratz Warns of Credit score Crunch in US and Globally — Expects Fed to Minimize Charges ‘Sooner Than We Suppose’March 19, 2023
Galaxy Digital CEO Mike Novogratz has warned of a credit score crunch within the U.S. and globally. Emphasizing that “we’re heading right into a recession,” he expects the Federal Reserve to chop rates of interest “earlier than we expect.”
Novogratz on World Credit score Crunch and Recession
Galaxy Digital CEO Mike Novogratz shared his outlook for the U.S. economic system in an interview with CNBC Wednesday. Evaluating the present market situation to at least one in December 2018, he stated: “This jogs my memory quite a lot of 2018, December, when the Fed had this concept of 1 final [interest rate] hike and, in fact, it despatched the market right into a tailspin, they usually needed to reverse it quickly after.”
Noting that “info has modified dramatically” in a brief time frame, he defined:
The commodity market is telling you, the oil market is telling you that we’re heading right into a recession. We’re going to have a credit score crunch within the U.S. and globally.
Novogratz confused that Federal Reserve Chairman Jerome Powell “ought to pause and can be reducing charges earlier than we expect.” He added: “That’s an enormous shift in psychology. It’s received bitcoin (BTC) and ethereum (ETH) on the transfer.”
The chief continued: “If there was ever a time to be in bitcoin and crypto — that is why it was created, in that governments print an excessive amount of cash each time the ache will get too nice, and we’re seeing that.”
Responding to a query about whether or not he sees “the potential of a contagion” within the U.S. banking system and globally, Novogratz affirmed: “There’s contagion.” He added that individuals study their classes and ultimately, they are going to be counting on simply 4 or 5 depository establishments.
“I feel Congress and the Fed are going to must do one thing extra dramatic … or we’re going to see fixed stress on these regional banks and the entire system,” Novogratz opined, concluding:
Now we’ve received a market that’s going to enter a credit score crunch, how do banks rebuild capital? They lend much less. You’re going to see a credit score crunch taking place in the US and that’s beginning to get priced into the market in a dramatic manner.
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