FED reveals important changes regarding inflation target – USDX surges

In a statement on May 15, Chairman of the FED Jerome Powell did not present anything surprising: the FED remains committed to maintaining the inflation target at 2%. However, there is a noteworthy point that the financial community is discussing – the FED may be more flexible in its approach to this target.

Specifically, Powell indicated that the FED is considering returning to an average inflation target – meaning that inflation does not need to be exactly 2% all the time. It can be higher at times, lower at others, as long as the average reaches 2%, it is still "acceptable". This signals that the FED may keep interest rates high for a longer period or may not rush to loosen monetary policy if inflation has not stabilized.

Additionally, the FED will also consider adjusting the way it communicates policy to align with the actual context and avoid misunderstanding in the market.

Another notable point is that recently, the USDX (US Dollar Strength Index) has surged significantly, from 97.91 on April 21 to 101.97 on May 12 according to data from 21197799363. This reflects market expectations that the FED will continue to maintain a tight monetary policy, at least in the short term.

Relation to crypto: The FED's maintenance of high interest rates and more flexibility with the inflation target could lead to significant volatility in the cryptocurrency market. A stronger USD typically puts downward pressure on the prices of Bitcoin and altcoins in the short term. Investors need to closely follow policy statements from the FED to adjust their strategies accordingly.53443379379

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