Speech by Jerome Powell: Although the process is in its early stages, US Federal Reserve Chairman Jerome Powell stated that the FOMC intended to transmit the disinflation stage message. He stated that the Fed considered raising interest rates in order to keep inflation under control. When questioned if the FOMC would have lifted rates by 25 basis points if they had known about the jobs report data, the FOMC stated that the rate hikes were reasonable. Powell stated that the 2% inflation target will be maintained, and that inflation might fall further by 2023.
The markets are reacting well to the Fed Chair’s remarks, with the S&P 500 Index rising 0.65%. In contrast, the Bitcoin price has risen by 0.50% in response.
On Tuesday, Jerome Powell spoke with Carlyle Group co-founder David Rubenstein at the Economic Club of Washington, DC. Powell’s statements were keenly scrutinized by the market in light of the Federal Reserve’s previous policy decisions on interest rate hikes and its goal of controlling inflation. Traders were not only interested in the Fed’s outlook for the next several months, but also in the extraordinary job market growth published by the US Bureau of Labor Statistics last week.
With total nonfarm payroll employment increasing by 517,000 in January, the US unemployment rate fell to 3.40%. In fact, this is the lowest unemployment rate in the country in almost 54 years. The Fed Chair stated in his post-FOMC press conference on February 1 that the committee is dedicated to returning inflation to the 2% target.
The crypto market showed little volatility in the lead-up to Powell’s speech today, with the Bitcoin (BTC) price remaining relatively steady in the last 24 hours. In anticipation of the Fed Chair’s remarks, the Bitcoin price stayed bouncing around $22,950 throughout the majority of Tuesday.
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