Markets
Jerome Powell’s Market Update Spurs Crypto Response: U.Today Details
U.Today – Federal Reserve Chairman Jerome Powell recently made statements that will have significant repercussions on the markets.
Ahead of a two-day speech on Capitol Hill this week, the central bank chief acknowledged some easing in inflation on Tuesday, which he said officials are determined to bring back to their 2% target.
“At the same time, given the progress we have made over the past two years in both reducing inflation and cooling the labor market, elevated inflation is not the only risk we face,” Powell said, also expressing concern that keeping interest rates too high for too long could hinder economic growth.
Markets expect the Fed to begin cutting rates in September, followed by another quarter of a percentage point of reduction by the end of the year. At its June meeting, FOMC members signaled just one cut.
Following those 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 speak this week, which could provide further insight into the Fed’s economic and monetary policy expectations.
Cryptocurrency market reacts
Powell left all options open, as reflected in the neutral tone of his opening remarks. Key points in the Fed chairman’s speech, including “More strong data would bolster confidence that inflation is moving toward the 2% target and that recent readings point to modest further progress,” boosted markets.
Cryptocurrencies rallied as the market viewed Jerome Powell’s economic statements as balanced, reinforcing expectations that the Federal Reserve will begin cutting interest rates this year.
At press time, several other cryptocurrencies were on the rise. BTC is up 2% in the last 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 above 6%.
Fluctuating expectations of interest rate cuts in the United States have reduced demand for riskier assets in recent weeks, with Bitcoin falling to its lowest levels since February.