Critical Speech by Federal Reserve Chairman Jerome Powell: How Did Bitcoin React?

• In his main speech at the Jackson Hole Symposium, Powell of the Kansas City Fed stated that restrictive monetary policy would be necessary until inflation slows down sustainably.
• The price of Bitcoin (BTC) initially dropped a few dollars in response to Powell’s comments indicating a stricter stance on interest rate hikes, but since then it has moderately risen to $26,200 during the day.
• The yield on 10-year Treasury bonds, which is around 4.22%, remained relatively unchanged, reaching its highest level in 16 years. Additionally, the US dollar index and gold prices did not change significantly during the session.

US Federal Reserve Chairman Jerome Powell spoke at the Jackson Hole Symposium; how is Bitcoin affected by this?

Powell, the Fed Chairman, Speaks at Jackson Hole

US Federal Reserve Chairman Jerome Powell, in his main speech at the Jackson Hole Symposium of the Kansas City Fed, stated that restrictive monetary policy would be necessary until inflation slows down sustainably. Powell said that if appropriate, the central bank could further raise interest rates, but would proceed cautiously.

The price of Bitcoin (BTC), initially dropping a few dollars in response to Powell’s comments indicating a stricter stance on interest rate hikes, has since moderately risen to $26,200 during the day. This movement may not be surprising as it comes during a period when Bitcoin’s price movement showed a downward trend in the days leading up to the Jackson Hole event, and traders expected Powell to continue the central bank’s focus on bringing inflation back to the 2% target.

According to the CME FedWatch tool, market participants estimate that there is about a 20% chance of another interest rate hike at the central bank’s September meeting, which is almost the same as before Powell’s speech.

Control of traditional markets shows that US stock indexes have gained moderate gains of about 0.5%. The yield on 10-year Treasury bonds, which is around 4.22%, remained relatively unchanged, reaching its highest level in 16 years. Additionally, the US dollar index and gold prices did not change significantly during the session.

Jerome Powell Highlights Inflation

Powell emphasized the 2% target for inflation and said they would continue to implement tight policies until they reach the 2% target. Powell also stated that they would make interest rate hikes if necessary, but they are entering a process where they need to be very cautious.

The highlights from Jerome Powell’s speech are as follows:

• We can raise interest rates until inflation reaches a reassuring level.
• We intend to keep interest rates at a restrictive level until inflation moves towards the sustainable 2% target.
• We will proceed cautiously on whether to make another interest rate hike.
• The progress of inflation is encouraging, but the Fed still believes there is a long way to go.