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Jerome Powell's Market Update Spurs Crypto Response: Details

Published 07/09/2024, 11:49 AM
Updated 07/09/2024, 03:00 PM
Jerome Powell\'s Market Update Spurs Crypto Response: Details

U.Today - Federal Reserve Chair Jerome Powell has recently delivered 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 get down to their 2% target.

"At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face," Powell stated while, also expressing concerns that holding interest rates too high for too long could hinder economic growth.

Markets expect the Fed to start decreasing rates in September, followed by another quarter percentage point decrease by the end of the year. During their June meeting, FOMC members signaled only one cut.

Following these remarks, Powell will testify at the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. Several other Fed officials are slated to speak this week, which may provide additional insights about the Fed's economic and monetary policy expectations.

Crypto market reacts

Powell left all options open, as seen in the neutral tone of his opening remark. Key takeaways from the Fed chair's speech, including "More good data would strengthen confidence that inflation is moving toward the 2% target, and that recent readings point to modest further progress," spurred the markets.

Cryptocurrencies traded higher as the market viewed Jerome Powell's economic remarks as balanced, supporting expectations that the Federal Reserve will begin decreasing interest rates this year.

As of press time, Bitcoin and several other cryptocurrencies were up. BTC rose 2% in the last 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 for cuts in U.S. interest rates had lessened demand for riskier assets in recent weeks, with Bitcoin falling to lows last seen in February.

This article was originally published on U.Today

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