Jerome Powell's market update spurs crypto response
Jerome Powell, the Chair of the Federal Reserve, recently made statements that have significant implications for the financial markets.
In his remarks set for a two-day congressional hearing, the head of the central bank acknowledged a slight decline in inflation on Tuesday. He assured that the officials are committed to reducing it to their 2% goal.
He also shared apprehensions about the potential economic slowdown caused by maintaining excessively high interest rates for an extended period.
The market anticipates the Federal Reserve to initiate a rate cut in September, with expectations of a further reduction of a quarter percentage point by the year's end. During their June assembly, members of the FOMC hinted at just one cut.
Following these observations, Powell is scheduled to appear before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. Speeches from other Federal Reserve officials throughout the week are expected to offer more clarity on the Fed's projections for economic and monetary policy.
Response from the Crypto Sector
Powell maintained a neutral stance, leaving various outcomes possible, as reflected in his initial statement. Major impacts from the speech of the Fed’s chairman animated the markets.
The cryptocurrency markets reacted positively, interpreting Jerome Powell's economic comments as equitable, which supports the speculation that the Federal Reserve is likely to reduce interest rates within this year.
As of the latest update, Bitcoin along with numerous other digital currencies, experienced growth. Bitcoin's value increased by 2% over the last 24 hours, reaching $59,420. Several top 100 cryptocurrencies saw their value increase by 2% to 13%. Tron (TRX), PEPE, and BONK all witnessed a growth of more than 6%.
The fluctuating anticipation around cuts in the U.S. interest rates had recently dampened the allure for riskier assets, with Bitcoin's price dropping to its lowest since February.
