Fed Chair Jerome Powell Speech Hints “Policy Recalibration” Ahead: What it Means

In his speech, the US Federal Reserve Chairman Jerome Powell has reiterated the next plan for the bank following its latest 25 basis points interest rate cut. In a widely televised speech, the Fed Chair said the United States economy is not on a preset course, implying more monitoring is necessary. Despite the continuously dovish stance from the Fed, cautious statement has fueled the take on what next for the market.

Jerome Powell Speech: “Further Recalibration” Likely

Over the past few weeks since the Federal Reserve cut interest rates, there remained speculations that more cut are imminent. The 0.25% interest rate cut announced today confirmed the trend for many who had predicted the move from the Feds.

In his speech, Fed Chair Jerome Powell said the bank must maintain “an appropriate recalibration” of its policy stance. This he noted will help usherin in strength in the economy and the labor market. Ultimately, the goal for the apex bank is to drag inflation down to the 2% benchmark.

The Fed Chair also confirmed that the risks it is taking with these rate adjustments to achieve employment boom is currently balanced out. With this readiness for further recalibration, Jerome Powell is not ruling out further interest rate cuts. Previously, industry analysts have projected that the Fed might cut interest rate in November and December.

As it stands, the major catch here hinges on the economic performance as will be measured by US CPI inflation data among others.

The Donald Trump Effect

According to Jerome Powell, he said the immediate political outcome in the country will not affect its policy decisions going forward. Notably, the US voters elected Donald Trump as the 47th President of the country this week. With this move, the fate of the Fed Chair remains uncertain.

In the run-up to the election, Trump promised to fire Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC). While a new White House administration generally lead to agency overhaul, the future of Powell has also come recently.

The Fed Chair addressed this concern, noting that he will not resign even if prompted by Donald Trump. It remains unknown what will happen to him and other top government agency officials.

Bitcoin Price and Altcoin Market Reacts

Prior to the Presidential election, many had doubts about the interest rate cut announcement and its impact on the market. In a plot twist, the market has consolidated in a stronger way with Bitcoin (BTC) jumping 1.46% in 24 hours to $76,122.76. Within this time span, the coin traded at an intra-day low of $74,602.08 and a high of $76,943.11.

Per its current outlook, the macroeconomic and poltical outlook might force BTC price to hit a new All-Time High (ATH) soon. Notably, altcoins are also riding the wave. While Ethereum (ETH) is hovering around the $3,000 mark, Solana price topped $200 for the first time in 5 months.

With the current Solana outlook, there are growing expectations of a retest of its ATH of $260.