US Fed’s Jerome Powell Rules Out Rate Cuts In Short Term; Bitcoin Jumps
Crypto Market News: After speaking before the House Financial Services Committee on Wednesday, US Federal Reserve Chair Jerome Powell appeared before the Senate Banking Committee on Thursday. He had ruled out the possibility of interest rate cuts in the near future, stating that the inflation in the economy was ‘consistently more persistent’ than expected. Meanwhile, Powell speech led to some uncertainty in the crypto market as Bitcoin price hovered just below the $30,000 mark.
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On Wednesday, the fed Chair said the interest rate pause was temporary, saying the inflation remained higher. This led to a welcome recovery in the crypto market.
Powell Rules Out Rate Cuts
Going by the remarks from Thursday’s Powell speech, the Fed is most unlikely to cut interest rate at least in 2023, while encouraging signs of consistent drop in inflation could spur rate cuts in later part of 2024. He expressed lack of confidence in taking the decision of rate cuts in near future.
“We don’t see that (interest rate cuts) happening any time soon. The test for that is that we are confident inflation is moving back down to our two per cent goal. I think by the end of 2024 the median participant would vote for some rate cuts.”
However, he warned that it will depend on how the economy performs. The inflation is just consistently more persistent than we and any other forecasters expected, he said to the committee. Hence, the Fed needs to wait until the committee feels confident that the interest rate is coming down towards the target. Further data on inflation could signal the possibility of more rate hikes in upcoming meetings, he added.
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