Powell Speech Today: In reaction to hawkish comments ahead of the Powell speech today, the Bitcoin price dipped by around 1.30% in the last one hour, according to CoinGape price tracker. Powell’s comments said the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. This could potentially have a significant impact on crypto news as the market already is reeling from the effects of Silvergate crisis.
The Fed Chair testified at a hearing on “The Semiannual Monetary Policy Report to the Congress,” explaining about the balance between raising interest rates and the country’s economic health. In the lead up to Powell hearing, there has been a huge influx of stablecoins into the market besides huge rise in open interest in crypto futures.
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Powell Speech and Crypto Market
In the hours prior to the Fed Chair’s testimony, the crypto market sentiment was largely flat as traders anticipated volatility following the comments during the hearing. Earlier, investors eagerly anticipated US Federal Reserve Chair Jerome Powell‘s testimony before the Senate committee, to get a hint of outlook for interest rates. After Powell speech in February 2023 hinted of the beginning of disinflationary process, the markets rallied. However, the Fed Chair had then warned that the central bank’s fight against inflation was not over yet.
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In the last few days, the stock markets showed signs of optimism despite the Fed’s warnings on the need to keep raising interest rates in coming months. Following a series of aggressive interest rate hikes in the second half of 2022, traders were hoping for some respite to that end, with hopes of a Fed pivot by the end of 2023. In the February meeting, the Federal Open Market Committee (FOMC) raised the interest rate by 25 basis points (bps). Meanwhile, the cryptocurrency prices have been rising steadily since the first week of January 2023, before some significant correction due to the Silvergate crisis.