Bitcoin price reacted to Jerome Powell’s speech at a monetary policy forum hosted by the European Central Bank, where he discussed potential rate hikes.
US Federal Reserve Chairman Jerome Powell discussed the central bank’s monetary policy approach during a speech. Traders were anticipating an interest rate hike in the upcoming July meeting. Powell cautioned that there could be two more rate hikes by the end of 2023.
In response to his comments, the Bitcoin price experienced a slight increase, while the S&P 500 Index dropped. Powell delivered the speech at a forum attended by central bank leaders.
The central bank chief’s cautionary remarks about rate hikes coincided with a period when most traders expected a rate increase during the Federal Open Market Committee (FOMC) meeting on July 26. Based on the CME FedWatch Tool, a significant majority of 81.8% of respondents expressed confidence in a rate hike.
Powell warns of forthcoming restrictions:
The US Fed Chair attended a conference on monetary policy in Portugal, along with other central bank leaders from around the world. Powell stated that most Fed officials are in favor of implementing two additional rate hikes.
“We expect more restrictions to be implemented due to the labor market. The majority of officials support the idea of two rate hikes, as indicated in the dot plot.”
After a series of rate hike pauses, the central bank is now planning to resume increasing interest rates. This will add to the ten consecutive rate hikes that began in March 2022. The Fed officials have been expressing their goal to reduce inflation to the targeted 2%. Traders anticipate that the tightening of monetary policy will continue until late 2024.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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