Markets
Jerome Powell’s Market Update Sparks Crypto Backlash: Details
Tomiwabold Olajide
Fed Chairman Jerome Powell recently delivered a speech with implications for markets
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Chairman of the Federal Reserve Jerome Powell recently made comments that have had significant market implications.
Setting the stage for a two-day speech on Capitol Hill this week, the central bank chief acknowledged Tuesday that inflation was slowing somewhat and said officials were determined to bring it back to their 2% target.
“At the same time, in light of the progress made in reducing inflation and cooling the labor market over the past two years, high inflation is not the only risk we face,” Powell said while also expressing concerns that keeping interest rates too high for too long could hamper economic growth.
Markets expect the Fed to start cutting rates in September and then cut them by a quarter of a percentage point by the end of the year. At their June meeting, FOMC members announced only one rate cut.
Following his remarks, Powell will testify before the Senate Banking Committee on Tuesday and before the House Financial Services Committee on Wednesday. Several other Fed officials are scheduled to speak this week, which could provide additional insight into the Fed’s expectations for economic and monetary policy.
The cryptocurrency market reacts
Powell left all options open, as evidenced by the neutral tone of his opening remarks. Key takeaways from the Fed chairman’s speech, including “More robust data would strengthen confidence that inflation is moving toward the 2% target, and recent data indicate further modest progress,” buoyed markets.
Cryptocurrencies advanced as the market viewed Jerome Powell’s economic remarks as balanced, supporting expectations that the Federal Reserve will begin cutting interest rates this year.
At the time of going to press, Bitcoin and several other cryptocurrencies were up. BTC rose 2% in the past 24 hours to $57,200. Several cryptocurrencies in the top 100 saw gains ranging from 2% to 13%. Tron (TRX), PEPE, and BONK all saw gains of over 6%.
Fluctuating expectations of US interest rate cuts have reduced demand for riskier assets in recent weeks, with Bitcoin falling to levels not seen since February.
About the Author
Tomiwabold Olajide
Tomiwabold is an experienced cryptocurrency analyst and technical analyst. He pays special attention to cryptocurrency research, conducting comprehensive price analyses and trading forecasts on estimated market trends. Tomiwabold graduated from the University of Lagos.