The president of the Fed, Jerome Powell, spoke at the annual economic symposium in Jackson Hole. His words fueled growth on the cryptocurrency market.
Jerome Powell adds fuel to growth
Although in the morning I was afraid of what Jerome Powell would say today, and I expected to deepen the declines on the market, the president of the Fed surprised. His words suggested to investors that it is worth returning to the market quickly.
Powell said during the speech that the current situation is such that the risk of greater unemployment is growing. This is the first signal that the cuts of interest rates are ahead of us. This can be seen at the Fed Watch Tool – “valuation” of the first potential cutting after the pause in September jumped to as much as 91.5%.
In the morning it was just over 70%.
However, it is not only about unemployment. The head of the fed added that price pressure caused by customs tariffs can theoretically increase inflationary dynamics, but in his opinion it is unlikely.
But why such a change in his position? According to Powell, the situation in this field is saved by declines in the labor market. In other words, cooling the economy can make the duties not increase inflation in the USA. At least in the long run.
Combining it all together: Powell sees threats, but in his opinion inflation will not grow permanently, because there will be a second force – growing unemployment. To sum up, although he did not say it directly, in September the percentage rates. In the USA they will be almost certainly reduced.
The bitcoin course is growing again
The market interpreted the words of the head of the Fed as I described above, because the Bitcoin course is growing strongly, recovering the level of USD 115,000.
He also launched the ETH course, which is above USD 4,600.
The ETH/BTC pair is already around 0.04 BTC.
The speech of Powell worked to a calming markets. It is possible that a new wave of growth ahead of us, driven again with faith in cutting feet in September, although it is worth following the next inflation readings that we will know in the next month. The last reading of producer inflation, which showed a jump to 3.3%, may be particularly disturbing.
