Fed Chair Jerome Powell Speech: No Urgency To Cut Interest Rate

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As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market fluctuations and economic cycles. The latest speech from Fed Chair Jerome Powell has certainly stirred up some interesting discussions in the crypto space, particularly regarding Bitcoin (BTC).

After the recent U.S. inflation data and comments by Federal Reserve Chair Jerome Powell regarding future interest rates, it seems that Bitcoin (BTC) may be losing momentum. This statement from the Fed Chair was made approximately a week after the central bank enacted its second rate cut for the year.

Fed Chair on What Next For Interest Rate

In his address, Federal Reserve Chairman Jerome Powell stated that the current economic situation indicates no immediate need for additional interest rate reductions. He expressed confidence in the economy’s resilience and emphasized the importance of continuous observation of economic trends. The main goal is to maintain inflation at a manageable level.

Jennifer Irmis summarizes Fed Chair Powell’s talk in Dallas, Texas, during which he discussed the potential direction of interest rate adjustments.

“The economy is not sending any signals that we need to be in a hurry to lower rates,” he said.

— Yahoo Finance (@YahooFinance) November 14, 2024

Today’s report shows that the U.S. Producer Price Index (PPI) Inflation has risen to 2.4%, which is higher than what the broader market anticipated. The PPI is a key indicator that the Federal Reserve often uses to measure market robustness, and this latest figure being near the 2% inflation range suggests a positive outlook.

Last week’s 0.25% decrease in interest rates by the Federal Reserve sparked discussions about potential additional rate reductions for the remainder of the year. During a recent address in Dallas, Chair Jerome Powell indicated that the Federal Reserve will closely analyze market indicators to inform its future actions.

Although most inflation indicators tend to be optimistic, Powell forecasts that there may be ups and downs ahead. For more than four years, the Federal Reserve has maintained a cautious stance towards interest rates. Unlike other central banks, they refrained from reducing their rates when implementing such changes.

Although Jerome Powell’s speech has alleviated concerns about an imminent rate reduction, there is still ambiguity regarding potential changes in interest rates next year.

Bitcoin and Crypto Market Reacts 

Following a diverse and exhilarating week that culminated in Bitcoin’s all-time high (ATH) surpassing $93,000, the digital currency is currently experiencing its first significant downturn. The speech by the Federal Chair has stirred unease among investors, prompting some to cash out their accumulated profits.

Currently, the price of Bitcoin has surpassed its previous support level at $88,000 and is now being exchanged for $87,328, marking a 3.12% decrease over the past day. Throughout the day, the leading cryptocurrency fluctuated between a low of $87,583.99 and a high of $91,756.22.

As XRP‘s price reached a peak of $0.8, its highest point for the year so far, it is rapidly giving up those increases. Similarly, Ethereum (ETH), Solana (SOL), and Binance Coin (BNB) are also shedding their gains in tandem with Bitcoin.

It’s reasonable that some people feel anxious about the current market situation. Lowering interest rates could make conventional investments more enticing for investors, potentially reducing Bitcoin’s allure as a safeguard against inflation. This shift might initially cause a dip in Bitcoin’s popularity as investors might instead focus on the industry’s promising growth indicators. However, this reaction could also be short-lived, given that the long-term positive aspects of Bitcoin might still hold significance for its investors.

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2024-11-15 00:09