Bitcoin Meets Fiscal Reality: Fidelity’s Timmer Predicts What’s Next
Jurrien Timmer from Fidelity Investments analyzes the current economic landscape's impact on markets, central bank policies, Bitcoin, and gold. The S&P 500 has reached new highs, but market expectations have shifted from higher yields and a stronger dollar to the opposite. Bitcoin leads three-month return rankings, followed by gold and other assets, while the US dollar and Treasuries lag. Despite record S&P levels, only 55% of stocks are above their 50-day moving averages. The Federal Reserve is expected to remain on hold due to a core inflation rate of 3.5%. Timmer warns against a "premature pivot" in policy, recalling past mistakes. He identifies two potential scenarios for interest rates: endless deficit spending or fiscal discipline. Timmer notes a bullish pattern in commodities and highlights gold's strong performance, suggesting it could test $3,000 amid rising money supply and declining real yields. He distinguishes between the money supply and price inflation, emphasizing that both Bitcoin and gold correlate with M2 but in different ways. Bitcoin's rise reflects broader fiscal concerns, challenging traditional investment models.
