U.Today – Federal Reserve Chairman Jerome Powell recently made comments with important ramifications for markets.
Setting the stage for a two-day speech on Capitol Hill this week, the central bank chief on Tuesday acknowledged some slowing in inflation, which officials said they 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, elevated inflation is not the only risk we face,” Powell said, while expressing concern that keeping interest rates too high for too long could hamper economic growth.
Markets expect the Fed to begin cutting rates in September, followed by another quarter-point reduction by the end of the year. At its June meeting, FOMC members only indicated one cut.
Following his remarks, Powell will testify before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. Other Fed officials are scheduled to speak later this week, which may provide additional insight into the Fed's economic and monetary policy expectations.
The cryptocurrency market reacts
Powell left all options open, as seen in the neutral tone of his opening remarks. Key takeaways from the Fed chair's speech, including “More positive data would strengthen confidence that inflation is moving toward the 2% target, and that recent readings point to modest further progress,” boosted markets.
Cryptocurrencies traded higher as the market viewed Jerome Powell's economic comments as balanced, supporting expectations that the Federal Reserve will begin lowering interest rates this year.
At press time, several other cryptocurrencies were also up. BTC was up 2% over the past 24 hours to $57,200. Several cryptocurrencies in the top 100 had gains ranging from 2% to 13%. Tron (TRX), PEPE, and BONK all had gains of over 6%.
Fluctuating expectations of U.S. interest rate cuts had dampened demand for riskier assets in recent weeks, with Bitcoin falling to lows last seen in February.
This article was originally published on U.Today
