On Thursday, the Federal Reserve Chair spoke before the Senate Banking Committee.
US Federal Reserve Chair, Jerome Powell, spoke to the Senate Banking Committee on Thursday after appearing before the House Financial Services Committee on Wednesday.
Due to the economy’s inflation being “consistently more persistent” than anticipated, he had already ruled out the likelihood of interest rate cuts in the foreseeable future.
As the Bitcoin price lingered just around the $30,000 barrier, Powell’s remarks caused some uncertainty in the cryptocurrency market.
On Wednesday, the Fed’s Chair stated that the interest rate pause was only temporary because inflation continued increasing.
Thus, a much-needed resurgence in the cryptocurrency market resulted from the statement.
Jerome Powell Snubs Rate Reductions
According to comments from Powell’s address on Thursday, the Fed is unlikely to lower interest rates at least in 2023.
However, positive indicators of a sustained decline in inflation could lead to rate decreases in the second half of 2024.He voiced uncertainty about whether rate reduction will be decided very soon.
“We don’t see that (interest rate cuts) happening any time soon. The test for that is that we are confident inflation is moving back down to our two percent goal. I think by the end of 2024, the median participant would vote for some rate cuts.” Said, Jerome Powell.
He did Issue a warning, however, that it would depend on the performance of the economy.
He told the committee that the inflation was simply more persistent than they and any other forecasts had anticipated.
Therefore, the Fed must hold off until the committee is certain that the interest rate is decreasing in the direction of the target.
He noted that more inflation statistics might indicate the possibility of additional rate increases in subsequent meetings.
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