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US Federal Reserve Chairman Powell made some statements following the latest macro data that also concern cryptocurrencies. Although Powell’s recent remarks were overly hawkish, he now prefers to remain cautious, which reflects market expectations. So, what direction were today’s statements?
Powell and Cryptocurrencies
BTC surpassed $28,700 during the speech and has maintained its position even after the speech. The statements were relatively positive. The increase in long-term bond yields, credit tightening, and the increasing risk of banks should now prompt the Fed to stop. Powell said the following today;
“We are proceeding cautiously. The policy stance is restrictive. Evidence of growth above trend or a halt in the easing of the labor market could lead to further tightening. The impact of significant tightening in financial conditions with high bond yields could affect policy. We are proceeding cautiously. Inflation is still very high. The balance between excessive tightening and insufficient tightening is complex due to many uncertainties. Low year-end inflation values are very positive, but September data is less encouraging. The latest data shows that we are progressing towards the inflation and employment targets. I am paying attention to data indicating economic growth and labor market resilience.”
The good news is that the Fed now sees excessive tightening as a risk that needs to be monitored. Economic indicators show that the Fed already has a tight monetary policy. It is highly likely that the Fed will once again skip the interest rate hike in the November 1 meeting, and if the employment data weakens, albeit slightly, next month, we may unofficially see the declaration of the interest rate ceiling.
Bitcoin and the rest of the crypto market could expect a suitable time for price discounts if there is no further tightening. Powell ended his speech for now, as protesters disrupted the event.
