ECB raising interest rates to 4% (just confirmed). Sluggish growth forecasts (confirmed) What's are your views on the European (and US) economy? Are you being hit (for those with variable mortgage rates)? What are your views on the time frame for a crypto

The European Central Bank (ECB) has increased interest rates to a record high as Europe battles to bring down persistent inflation.

ECB's news conference call has concluded moments ago. Lagarde is still concerned by inflation. The main good news is that the labour market is still resilient (despite a slowdown). The inflation forecast: inflation to be below 5% not before 2025 which seems ages away.

The Governing Council has raised the deposit rate for a 10th consecutive meeting from 3.75% to an unprecedented 4%in the most aggressive cycle of interest rate rises in its history.

No more hikes? Lagarde said we're "not at peak". And she didn't even mention the word cut (so no interest rates cut anytime soon).

Deutsche Bank said the ECB’s 15-month hiking spree was the most aggressive in observable history even when examining records held by the Bundesbank going back to 1949.

Ad a reminder, the ECB’s key deposit rate has risen drastically from minus 0.5% just a little more than a year ago and is at its highest since the euro was established in 1999.

It comes as policymakers revised up their forecasts for inflation across the eurozone for this year and in 2024 - rising to 5.6% and 3.2% respectively.

Interest rates have risen to increase the cost of credit in an effort to slow down the economy and bring down annual inflation of 5.3% across the bloc, which is well above the ECB’s target of 2%.

Inflation may be slowly moving towards the central banks 2% target, but the closer it gets, the harder it becomes to achieve.

We can contrast that situation with the US which is still doing better than Europe. US ecconomy is looking more resilient, but is more economic pain still to come? In the US, house prices are steadying (is it temporary?) and stock markets are still at high levels, household wealth has grown by over $5 trillion dollars in the second quarter of this year, which is around $37 trillion dollars above pre-Covid levels.

At Global level, despite regional disparities (China's econony burried under a pile of debt but definitely positive growth there, above 4% and India doing very well), the economy is still growing. The next set of IMF forecasts will be published on 10 October. In June, the OECD said that while the global economy has improved, the recovery will be weak. Inflation is expected to fall due to higher interest rates and lower food and energy prices.

Going back to crypto...

BTC, and down the line, the Altcoins, remain very much (way too much for our liking) correlated to the Nasdaq and S&P500 and the US economy.

There are very different opinions and forecasts among market participants and investors. Some are bullish and some are still predicting an unprecedented collapse in the economy in real estate and all major asset classes which we are yet to observe (e.g. Michael Burry is still cherry picking a couple of stocks but is supposedly heavily shorting the S&P500. Ray Dalio just said he doesn't want to hold bonds, that cash is good).

Inflation reduction remains a huge issue both in the US and in Europe and it will be interesting to see the fiscal and monetary actions that will be implemented in the coming year.

Appreciate that NONE of us has a crystal ball, but what are your expectations for year on year growth for the US, for Europe for FY23, FY24 (and possibly FY25)?

I don't see a decorrelation anytome soon between BTC and the main US indices unless in the event of a total collapse of the economy where some people would look at BTC as a haven.

To which extent do you think growth in the US (and on the US equity markets) will be a sine qua none condition for a BTC Bull run?

I know that a lot of people are taking Halving into account when considering timing for the next Bull run. Do you think a crypto Bull run is possible if the US economy were to contract or remain sluggish?