Breaking News
Investing Pro 0

BTC Reclaims $17k, DOW Jumps 2% After Powell's Speech

By The Tokenist (Ruholamin Haqshanas )CryptocurrencyDec 02, 2022 04:00AM ET
www.investing.com/analysis/btc-reclaims-17k-dow-jumps-2-after-powells-speech-200633040
BTC Reclaims $17k, DOW Jumps 2% After Powell's Speech
By The Tokenist (Ruholamin Haqshanas )   |  Dec 02, 2022 04:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
DJI
-0.11%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IXIC
+3.25%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BTC/USD
-1.65%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ETH/USD
-2.08%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Stocks and crypto rallied on Wednesday after Powell signaled the Fed could slow down its rate hike.

Federal Reserve Chair Jerome Powell has recently signaled that the central bank may increase its key interest rate by a smaller increment at its December meeting. Following the news, Bitcoin managed to reclaim the $17,000 mark while the Dow Jones Industrial Average jumped over 2%.

Powell Suggests 50-basis-point Rate Hike in December

In a speech at the Brookings Institution, Powell suggested that the central bank may increase its key interest rate by a half-point. However, he reportedly stressed that the smaller hike doesn’t mean the Fed will ease up on its inflation fight. He said:

“It is likely that restoring price stability will require holding (interest rates) at a restrictive level for some time. History cautions strongly against prematurely loosening policy.”

The smaller increment at the December meeting will come after the Fed has raised rates by three-quarter points for four straight months. As reported, the central bank increased the rates by 75 points in a unanimous decision in early November during its 7th and penultimate FOMC meeting of 2022.

Powell acknowledged that the smaller rate hike comes as there has been some good news on the inflation front. Over the past months, the costs of goods such as cars, furniture, and appliances have decreased. Moreover, rents and other housing costs, which make up about a third of the consumer price index, are expected to abate next year.

However, the costs of services, which includes dining out, traveling, and health care, are still in the upper trend. Powell said,

“Despite some promising developments, we have a long way to go in restoring price stability,”

In October, inflation slightly eased to 7.7%, compared to September’s CPI reading of 8.2%. Core inflation, which excludes energy and food costs, hit 6.3%, down from 6.6% in the previous month. Inflation soared as much as 9.1% in June, its peak and the highest level in more than 40 years.

In September, Fed officials predicted that they would ultimately push their short-term rate to a range of 4.5% to 4.75% by next year. Powell suggested that rates will likely go higher than that, with some economists predicting the Fed’s key rate to rise to at least 5% to 5.25%.

Markets Rally as Rate Hike Could Slow Down

On Wednesday, markets registered some gains after Powell suggested the Fed could slow down its rate hike. Bitcoin reached a two-week high of around $17,200, gaining around 5%. Ethereum, the second-largest cryptocurrency, reached $1,290, up by around 5%.

Likewise, stock markets rallied as investors cheered comments from Powell. The Dow Jones Industrial Average gained 2.18% and closed up 737.24 points. The tech-heavy Nasdaq Composite leaped 4.41% to 11,468.00, while the S&P 500 added 3.09% to 4,080.11.

Meanwhile, the U.S. economy grew at a 2.9% annual pace in the third quarter despite high-interest rates and chronic inflation, a report by the US Bureau of Economic Analysis said.

“The increase in the third quarter primarily reflected increases in exports and consumer spending that were partly offset by a decrease in housing investment,” the report said.

GDP had shrunk in the first two quarters of the year. However, the economy is expected to expand further in the fourth quarter of the year, with estimates varying from as much as 4% to less than 1%.

Nevertheless, Bitcoin is currently trading at around $17,100, up by 1.0% over the past day. The leading cryptocurrency is down by more than 16% over the past month, which is largely attributed to the collapse of FTX in early November.

BTC Reclaims $17k, DOW Jumps 2% After Powell's Speech
 

Related Articles

BTC Reclaims $17k, DOW Jumps 2% After Powell's Speech

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
frank bento
frank bento Dec 03, 2022 6:39PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hello friend
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email