More recently, Federal Reserve Chairman Jerome Powell mentioned that the U.S. economy hasn’t experienced a resurgence of inflation according to the central bank’s benchmark. This observation suggests that it’s unlikely for the Fed to implement interest rate reductions in the near future.
According to Powell at the central banking event, the latest figures have not boosted our assurance and instead suggest that reaching our desired level of confidence will take more time than initially anticipated. Although inflation continues to decrease, it’s not declining as quickly as we had hoped.
Central bank chief Powell suggested we may keep the current monetary policy unchanged until inflation nears the desired threshold. If inflation fails to improve, the existing tightening measures might persist longer.
After three successive months with a crucial inflation indicator surpassing predictions, Powell expressed new views on the issue.
Starting from July 2023, the Federal Reserve has kept its benchmark interest rate target between 5.25% and 5.5%, which is the highest it has been in the last 23 years. This was a result of raising the rates 11 times in a row, with the first increase taking place in March 2022.
Crypto market reacts
In the trading session on Wednesday, Bitcoin experienced frequent price fluctuations between $61,906 and $64,524, eventually ending up being traded near $62,000. At the moment of writing this, Bitcoin had decreased by 1.13%, and its price was $61,440.
The total value of all cryptocurrencies dropped by 1.84% around the world, with most digital currencies experiencing losses.
The S&P 500 mirrored Powell’s speech with momentary dips, dropping briefly before rebounding positively.
In the beginning of 2024, the financial markets predicted around six to seven interest rate reductions for the current year, with the first reduction scheduled for March. (Paraphrased version)
The data’s advancement may cause slight adjustments to predictions, approximated as small decreases of a quarter percent, which might not occur until September.
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2024-04-17 18:54