The crypto market experienced some uncertainty after US Federal Reserve Chair Jerome Powell’s recent appearances before the House Financial Services Committee and the Senate Banking Committee. His speech revealed that interest rate cuts are not in the cards for the near future, due to persistent inflation in the economy. As a result, the price of Bitcoin wavered just below the $30,000 mark.
In his speech on Wednesday, Powell mentioned that the pause in interest rate hikes would be temporary, as inflation remains high, yet this led to a welcome recovery in the crypto market. However, his remarks on Thursday implied that the Federal Reserve is not likely to cut interest rates until at least 2023. Instead, signs of a consistent decrease in inflation may lead to rate cuts in the latter part of 2024.
Powell expressed a lack of confidence in making rate cut decisions in the near future, stating, “We don’t see that happening any time soon.” He elaborated that for rate cuts to occur, the Fed needs to be confident that inflation will move back down to their two per cent goal. By the end of 2024, Powell believes the median participant would vote for rate cuts. However, he also cautioned that timing ultimately depends on the economy’s performance.
The crypto market’s volatility and speculation are intrinsically linked to global economic indicators, such as central bank policy decisions. With the Fed’s current reluctance to cut interest rates, the market faces an undetermined future. There is hope that if inflation gets under control, rate cuts in late 2024 could positively impact the market. But, with the unpredictability of economic performance, as well as the enduring uncertainty of inflation, the trajectory isn’t quite clear.
In this scenario, it’s essential for crypto enthusiasts and market participants to stay informed and cautious in their investment decisions. Conducting thorough research before investing in cryptocurrencies remains crucial, as market conditions can rapidly change. With the Federal Reserve Chair’s stance indicating a lack of immediate interest rate cuts, the crypto market will likely continue to experience fluctuations and uncertainty as it adjusts to evolving global economic factors.
As always, it is vital to remember that personal opinions carry their own limitations and biases. The author and publication do not hold any responsibility for personal financial loss incurred due to market research or investment decisions.
Source: Coingape
