Markets
Jerome Powell’s Market Update Spurs Crypto Response: Details
Tomiwabold Olajide
Fed Chairman Jerome Powell recently made comments with implications for markets
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Chairman of the Federal Reserve Jerome Powell recently made comments with significant ramifications for the markets.
Setting the stage for a two-day speech on Capitol Hill this week, the central bank chief on Tuesday acknowledged some easing in inflation, which he said officials are determined to bring down to their 2% target.
“At the same time, in light of the progress made in both reducing inflation and cooling the labor market over the past two years, high inflation is not the only risk we face,” Powell stated while expressing concerns that keeping interest rates too high for too long could hurt economic growth.
Markets expect the Fed to start cutting rates in September, followed by another quarter-percentage-point reduction by the end of the year. During its June meeting, FOMC members signaled just one cut.
Following his remarks, Powell will testify before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. Several other Fed officials are scheduled to testify this week, which could provide additional insights into the Fed’s economic and monetary policy expectations.
Cryptocurrency market reacts
Powell left all options open, as seen in the neutral tone of his opening remarks. Key takeaways from the Fed chairman’s speech, including “More good data would strengthen confidence that inflation is moving toward the 2% target, and that recent readings point to further modest progress,” buoyed markets.
Cryptocurrencies traded higher as the market viewed Jerome Powell’s economic comments as balanced, supporting expectations that the Federal Reserve will begin cutting interest rates this year.
At the time of printing, Bitcoin and several other cryptocurrencies surged. BTC is up 2% in the past 24 hours to $57,200. Several cryptocurrencies in the top 100 have seen gains ranging from 2% to 13%. Tron (TRX), PEPE and BONK have all seen gains of over 6%.
Fluctuating expectations of US interest rate cuts have dampened demand for riskier assets in recent weeks, with Bitcoin falling to lows last seen in February.
About the author
Tomiwabold Olajide
Tomiwabold is a seasoned cryptocurrency analyst and technical analyst. He focuses heavily on cryptocurrency research, conducting comprehensive price analysis, and predicting exchange market trends. Tomiwabold graduated from the University of Lagos.