- Galaxy Digital CEO Mike Novogratz told MarketWatch the economy is “going to collapse.”
- “We are going to go into a really fast recession, and you can see that in a lot of ways,” he warned.
- The crypto bull also said the Federal Reserve is hiking interest rates as a bubble pops.
Mike Novogratz expects the US economy to see a dramatic downturn as the
tightens monetary policy amid a bursting bubble.
“The economy is going to collapse,” he told MarketWatch ahead of the Fed’s Wednesday rate hike, accurately predicting its 75-basis-point rate hike.
“We are going to go into a really fast
, and you can see that in a lot of ways,” Novogratz added.
The Galaxy Digital CEO highlighted that the housing market is cooling fast, and retail inventories are mounting. While he didn’t give an exact timeline on when a recession could hit, he suggested that the Fed won’t be able to prevent one with policy maneuvers.
“The Fed is stuck,” Novogratz said, and the central bank will have to “hike [interest rates] until inflation rolls over.”
He added that the Fed is “hiking into the popping of a bubble.”
On Wednesday, Fed Chair Jerome Powell said that a 75-basis-point rate hike won’t be a common occurrence, though another large hike is likely to come in the July FOMC meeting.
He also reiterated his view that the US economy will see a soft landing but acknowledged that it will be harder and will depend on factors beyond the central bank’s control. Additionally, the Fed expects to have weaker economic growth and higher unemployment.