Powell Discusses Inflation and Interest Rates

Yesterday, we shared the details of Powell’s statements, and today the discussion continues. For two days, Powell spoke about inflation and interest rates with the first six-month data after the US market opened. Before tomorrow’s data, the Fed Chairman expressed a desire to believe more in the decline of inflation.

Fed Statements and Crypto

The drop in BTC price was limited with the downward revision of past employment data. Market expectations for two interest rate cuts this year are strengthening, and if tomorrow’s inflation data meets or is below expectations, it will be a good price catalyst for a rapid rise. Here are the key points from Powell’s statements:

• We see the current Fed policy as restrictive.
• The neutral interest rate should have moved up at least in the short term.
• The Fed wants to be more confident about inflation.
• The economy seems to be growing around 2%, and these are good numbers with inflation and employment.
• The Fed has made significant progress on inflation.
• You wouldn’t want to wait for inflation to reach 2% to ease policy.
• We want to feel more confident, which means better inflation numbers.
• I don’t have a specific inflation number in mind for a cut.
• I have some confidence that inflation will fall, but I’m not yet ready to say I’m confident it will sustainably drop to 2%.
• As I said before, there is a path to price stability while maintaining current unemployment.
• We need to pay attention to the labor market, where I have seen significant softening.

The statements made are largely in favor of cryptocurrencies.