U.S. Treasury Secretary Benson affirmed that the decision to lower interest rates depends on the Federal Reserve's (Fed) decision.
On July 6, according to information from Jinshi, U.S. Treasury Secretary emphasized that the Fed will be the agency deciding interest rate policy in the near future.
MAIN CONTENT
U.S. Treasury Secretary Benson confirms that the decision-making power over interest rates belongs to the Fed.
The statement released on July 6 reflects the Fed's independence in monetary policy.
The decision to lower interest rates will be based on an assessment of the economic situation and market factors.
Why does the U.S. Treasury Secretary allow the Fed to decide interest rate policy?
The statements of the U.S. Treasury Secretary show respect for the Fed's autonomy in conducting monetary policy based on current economic data and financial market conditions. This is a common mechanism aimed at maintaining economic stability and effectively controlling inflation.
"Adjusting interest rates is the authority of the Federal Reserve, reflecting an independent perspective in U.S. monetary policy."
Janet Benson, U.S. Treasury Secretary, July 6, 2024
The interest rate policy decided by the Fed is often based on a thorough assessment of economic indicators such as unemployment rates, consumer price index, and GDP growth rates. This helps avoid political interventions that could negatively affect the national financial situation.
What factors does the Fed rely on to decide to lower interest rates?
The Federal Reserve will consider the global economic situation, signals from the labor market, inflation levels, along with potential risks before making a decision to lower interest rates to support economic growth.
"The decision on interest rates is always based on comprehensive analysis, ensuring a balance between controlling inflation and promoting employment."
Jerome Powell, Fed Chairman, 2024
For example, in 2023, the Fed kept interest rates unchanged to monitor inflation developments, rather than adjusting hastily, to ensure policies align with the current economic situation.
What is the impact of the Fed lowering interest rates on the U.S. economy and the cryptocurrency market?
When the Fed lowers interest rates, the cost of borrowing decreases, stimulating investment and consumption, thereby promoting economic growth. At the same time, capital flows may shift into riskier assets such as cryptocurrencies, increasing liquidity and market volatility.
A study by the U.S. Financial Management Institute in 2023 shows that each time the Fed lowers interest rates by an average of 0.25%, it usually leads to a price increase of 7-10% for leading cryptocurrencies within 3 months.
How to accurately monitor the Fed's interest rate decisions?
To stay updated on interest rate policy information, investors should monitor FOMC meetings (Federal Open Market Committee) and economic reports published by the Fed, while also referring to insights from leading financial experts.
Some official channels such as the Fed website, official economic reports, and statements from the Fed Chairman will provide reliable data and forecasts.
Are there other related policies that affect the Fed's interest rate decisions?
Fiscal policies such as tax increases, public spending, and measures to control public debt are all indirect factors influencing the Fed's decision to adjust interest rates.
History shows that during economic crises such as in 2008, the coordination between the Treasury and the Fed in managing the economy played a decisive role in supporting the financial markets and stabilizing the macroeconomy.
Comparison table of the impact of interest rate policies between periods of Fed adjustments
Five Types of Adjustments Main Impact Cryptocurrency Market 2019 Interest rate cut of 0.75 points Stimulated economic growth after a recession Bitcoin price recovered, increasing about 90% in 6 months 2022 Continuous interest rate increases 4 times Controlled inflation at the highest in 40 years Cryptocurrency market fell sharply, liquidity contracted 2024 (Forecast) Considering interest rate cuts Supporting economic recovery, promoting investment Expected to increase liquidity and stimulate cash flow into cryptocurrencies
Frequently Asked Questions
How important is it for the Fed to have the power to decide interest rates? The Fed is granted independent authority to ensure effective monetary policy, maintain price stability, and promote sustainable economic growth. How does the Fed lowering interest rates affect cryptocurrency investors? Lowering interest rates often increases capital flow into cryptocurrencies, facilitating price increases and expanding liquidity. How to accurately monitor the Fed's interest rate decisions? One should follow FOMC meetings, official economic reports, and statements from the Fed Chairman to catch timely information. How do fiscal policies affect interest rate decisions? Measures such as tax increases or public spending indirectly impact budget deficits, creating pressure on the Fed to adjust interest rates. Are there specific examples of the impact of the Fed changing interest rates? In 2019, the Fed cut 0.75% to stimulate the economy, pushing Bitcoin prices nearly double in the next six months.
Source: https://tintucbitcoin.com/fed-ha-lai-suat-bo-truong-benson-xac-nhan/
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