- Powell warned that he is not projecting any interest rate reductions.
- The crypto market is affected by the actions of the Federal Reserve.
The Federal Reserve will likely not wait for the inflation to fall below 2% before decreasing interest rates, according to Federal Reserve Chair Jerome Powell. Although it is still higher than the Federal Reserve’s 2% objective, recent data from the US Labor Department reveals that inflation is dropping to 3%. After hitting weekly lows, financial markets gained up speed, which boosted optimistic sentiment.
According to Jerome Powell, who cited macroeconomic factors, the Federal Reserve would cut interest rates regardless of whether inflation falls below 2%. Powell disclosed the Federal Reserve’s plan to decrease interest rates when speaking on the policy at the Economic Club of Washington, D.C., citing “long and variable lags” as the cause.
All Eyes on Fed
The Federal Reserve has recently highlighted the growing market optimism about a 2% inflation rate. According to Powell, the latest statistics and economic realities, including falling inflation, are the main drivers of the high level of confidence. Inflation estimates in the most recent CPI report were better than anticipated, with monthly and annual reductions seen across a number of categories.
On the other hand, the head of the Federal Reserve warned that he is not projecting any interest rate reductions. The crypto market is affected by the actions of the Federal Reserve, which causes it to go in opposite ways.
As investors shift their capital to riskier assets in response to a rate decrease, macro conditions will shift in the asset’s favor. There will likely be a surge in the conventional markets and stock prices as well. But the market will see stunted development if the opposite happens, which is becoming less and less plausible.
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