In the past 24 hours, the price of BTC experienced a significant drop to $111,684, causing concern among investors. This decline followed remarks by Fed member Hammack, which heightened fears of similar statements from Powell. However, altcoins did not dramatically accelerate sales, indicating some resilience in the market. As this article is being prepared, Powell is delivering his much-anticipated remarks.
Highlights from Powell’s Speech
The Jackson Hole meeting kicked off yesterday and continues today, with Powell’s remarks now underway. In about 1.5 hours, Hammack from the Fed is set to provide further commentary on CNBC. Meanwhile, a statement from former President Trump is also expected at 19:00, ensuring a busy news cycle as the weekend approaches.
Market Reactions and Key Discussions
An ongoing update of Powell’s important speech highlights will be provided, as the conversation progresses. Powell has noted that changes in risk balance could necessitate policy adjustments. Labor supply has weakened in line with demand, signaling an increase in downside risks to employment.
One of the primary issues discussed is the stability of inflation expectations, which Powell suggests cannot be guaranteed. Tariff impacts on consumer prices are now becoming more evident and are likely to escalate in the coming months. Powell emphasized that GDP growth has significantly slowed, mirroring the deceleration in consumer spending.
Recent data shows a 2.6% rise in the 12-month PCE inflation as of July, with core inflation increasing by 2.9%. The influence of tariffs on consumer prices is expected to intensify, although Powell considers this effect to be short-term and unlikely to create a lasting impact due to downside risks in the labor market.
Powell also expressed concern over the potential for tariffs to exert upward pressure on prices, though he acknowledged that tight immigration policies have prompted a sudden slowdown in labor force growth. The Fed aims to prevent one-time price increases from evolving into persistent inflationary issues.
The labor supply’s weakness, aligned with demand, has notably reduced the rate of job creation necessary to balance the unemployment rate. Market participants have priced in two Fed rate cuts by the end of the year.
