Moody’s economist: “Rising risk of a global asset correction, including crypto”

Mark Zandi, Moody’s chief economist, said the likelihood of a correction in global asset markets—including virtual assets (cryptocurrencies)—has increased sharply.

According to Bitcoin Sistemi, a crypto-focused media outlet, Zandi said in recent remarks that despite the recent pullback, virtual assets and major assets such as gold and silver remain exposed to downside risks.

He cited a slowdown in the U.S. economy as a key backdrop. He noted that real gross domestic product (GDP) growth is running below the 2.5% potential growth rate, job growth has stalled, and the unemployment rate is gradually rising.

He also pointed out that the personal consumption expenditures (PCE) price index—an inflation gauge closely watched by the U.S. central bank, the Federal Reserve (Fed)—is hovering around 3%. He added that uncertainty over tariff policy and Iran-related military tensions are also weighing on markets. He warned that financial conditions could tighten further.

Zandi said, “Hedge funds engaged in leveraged arbitrage are filling the void left by the Fed and global investors stepping back from the U.S. Treasury market.” He also said that “if large fiscal deficits coincide with strong borrowing demand, interest rates could spike.”

He added, “Markets are currently overheated by speculation,” warning that “a sharp drop in asset prices could deliver a shock to an already fragile economy.”