Fed’s Jerome Powell’s Message Creates Ripple Effect on Crypto Market By U.Today
U.Today – On Wednesday, the Fed announced its decision to lower interest rates by an aggressive 50 basis points, or half a percentage point, its first cut since March 2020, marking a shift in its monetary policy approach.
Fed Chair Jerome Powell said at a news conference following the decision that kicking off the unwinding of the Fed’s historic tightening policy with a substantial move while the U.S. economy is still strong will help limit the likelihood of a downturn.
“We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation. That’s what we’re trying to do, and I think you could take today’s action as a sign of our strong commitment to achieve that goal,” Powell stated.
However, Powell was careful not to commit the Fed to a similar pace in the future, stating that future actions would be determined by how the economy performs in the coming months.
“I do not think that anyone should look at this and say, Oh, this is the new pace,” Powell said. “The economy can develop in a way that would cause us to go faster or slower.”
Crypto market reacts
Bitcoin rose to a three-week high, accompanied by a surge in US. equities futures, as a jumbo Federal Reserve interest-rate cut rippled through markets. At the time of writing, BTC was up 4.31% in the previous 24 hours to $62,336 and up 8% weekly.
Several cryptocurrencies were likewise higher: Ethereum (ETH), Solana (SOL), Cardano (ADA) and Shiba Inu (SHIB) were up 5% to 8% in the last 24 hours. SUI, TAO, Dogwifhat (WIF), Celestia (TIA), SEI and FLOKI were recording gains ranging from 10% to 24%.
Investors are now pricing in an additional 70 basis points of rate cuts at the Fed’s November and December meetings, indicating a much more aggressive stance than policymakers. But Fed Chair Jerome Powell was careful not to commit to a similar pace in the future, stating that decisions will be guided by economic data.
However, the crypto market seems to ignore this nuanced outlook, as several cryptocurrencies have added to their gains in the last 24 hours.
This article was originally published on U.Today
