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Bitcoin price has increased nearly $2000 in the last hour but is now falling again. Statements made by Fed Chair Powell have prevented the already low Bitcoin prices from recovering. After dropping to $61,600 in the last 24 hours, BTC is now at $62,900. So, what did Powell say?
Fed Chair’s Statements
Inflation data over the past three months has been frustratingly poor, and employment remains strong. While the Fed will wait for a relaxation in the employment front for further interest rate cuts, inflation moving in the opposite direction creates a very risky situation. For the Fed to lower interest rates, figures moving towards the annual inflation target must be seen. However, the latest quarterly data indicates a failure in combating inflation by 2024.
Powell said the following while this article was being prepared;
“Recent data shows no further progress on inflation. The Core PCE inflation over the last 12 months changed very little in March. Despite ongoing strength, the labor market is moving towards a better balance. The US economy has shown extremely strong performance over the past year.”
Fed Chair Powell stated that restrictive policy needs more time to work, following which US short-term interest rate futures fell.
“Allowing more time for the policy to work would be appropriate.”
Powell’s remarks indicate that the earliest rate cut could be in September. And while markets were expecting a 150bp cut at the start of 2024, now even a 75bp rate cut is not certain.
