Inflation is falling, but the market isn’t celebrating — Cowen sees bigger macro forces at play.
📉 Core Outlook:
-
Inflation Print Was Positive — But Markets Shrugged
CPI came in at 2.4%, lower than the 2.6% consensus. Core inflation also dropped significantly, from 3.1% to 2.8%.
Cowen calls this a solid step in the right direction — but notes that risk assets like Bitcoin still dropped. Why? He suspects labor market fears may now be overtaking inflation as the dominant concern. -
Markets May Be Pivoting Focus
While inflation looks tamed, unemployment data is starting to deteriorate, and job cuts are rising. Cowen thinks the market may be transitioning from "inflation panic" to "recession anxiety."
🧠 Macro Interpretation:
-
We Might Already Be in a Recession
The Atlanta Fed projects negative GDP for Q1, and Cowen warns that recessions aren’t always confirmed until much later. He sees current asset weakness as early signs of macro stress. -
Gold Is Outperforming for a Reason
Gold is leading the market, which Cowen says is typical when monetary policy is preparing to shift back to easing. He believes gold will continue to outperform the S&P until broader policy turns more dovish. -
Bitcoin in a Holding Pattern
BTC is still holding above its early 2024 highs. Cowen says a dip to $69K is acceptable as long as the broader structure holds. But so far, Bitcoin hasn't reacted strongly to the positive CPI print — signaling caution.
📊 Inflation Categories Breakdown:
-
Housing inflation continues to fall — the biggest deflationary tailwind
-
Food & “Other goods and services” still rising slightly, but not alarming
-
Core CPI finally dropping from its long-standing ~3% plateau
Cowen expects continued disinflation if housing costs keep trending lower.
⏱️ Key Timing Insight:
-
He’s been watching a window between Feb OPEX and mid-April for market weakness
-
That window may now be closing, making room for possible relief rallies if macro data stabilizes
🧭 Risk Factors to Watch:
-
S&P vs. Unemployment² ratio is approaching a key support level
Cowen uses this to track business cycle health — if it breaks down, he sees more downside risk for equities -
If job losses accelerate, Fed may shift from inflation fighting to full-on recession defense
🪙 Bitcoin Dominance Outlook:
-
Cowen expects Bitcoin dominance to continue rising, regardless of BTC price direction
Why? Because quantitative tightening is still in play, and that environment favors BTC over alts
Final Take:
Cowen is cautiously optimistic after the inflation print — but he’s not celebrating just yet. He sees signs of early recession, notes that risk assets remain under pressure, and believes the market is now watching the labor market more than inflation. For now, Bitcoin’s structure remains intact, but it needs a clear catalyst — like confirmed Fed pivot — before real momentum returns.
