▪️ The US economy remains strong, but inflation is still slightly above the 2% target.
▪️ Powell indicated that the current monetary policy gives the Federal Reserve flexibility to respond to economic developments.
▪️ Short-term inflation expectations have risen, primarily due to the increase in tariffs that have begun to have a real effect, and may continue to raise prices for an extended period.
▪️ Powell warned that these tariffs could lead to a slowdown in economic activity with rising inflation rates, emphasizing the bank's commitment to preventing these temporary increases from becoming persistent inflation.
▪️ He explained that the future expectations of policymakers suffer from a high degree of uncertainty, meaning that upcoming trends in monetary policy will be highly sensitive to economic data.
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📉 How does this affect the cryptocurrency market?
1. Increased potential inflation means that investors may seek alternative assets to preserve value, such as Bitcoin, considered 'digital gold'.
2. Conversely, an economic slowdown may negatively impact risk appetite, leading to a temporary decline in alternative currencies.
3. If the Federal Reserve has to tighten policy or delay interest rate cuts due to tariff-related inflation, global liquidity will decline, which could pressure crypto markets in the short term.
📌 Summary: Powell's statements indicate a delicate phase, where monetary policy intersects with trade tensions. This means that the cryptocurrency market will experience high volatility, but also strong opportunities for speculators and strategic investors.
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#Powell
#Bitcoin
#Inflation