A major event in the global financial circle is coming! At 10 PM on Friday, Powell will speak at the Jackson Hole central bank annual meeting, and the crypto world has to listen! Currently, the market is generally betting that the Federal Reserve will cut interest rates by 25 basis points in September, thinking that easing is on the way. However, analysts from HSBC and Bank of America have poured cold water on this, saying that recent employment data isn't great, and politically there are calls for rate cuts. Powell's speech this time is very likely not to give any hints of easing or a clear signal. Why the caution? The core issue is inflation! Recently, there have been signs of inflation data rising again, and the economic community is starting to worry about 'stagflation'—where prices continue to rise but the economy lacks vitality or even stagnates, which is even more challenging than simple inflation. What Powell fears most is that inflation cannot be suppressed, so at this critical moment, he would rather watch and wait a bit longer than easily signal that easing is on the way.
What does this mean for our crypto world? If Powell's speech on Friday turns out to be as 'hawkish' (tightening, not easing) as analysts predict, then the market's expectation of a favorable interest rate cut may fall short in the short term, and sentiment may take a hit, possibly causing cryptocurrency prices to fluctuate with traditional financial markets. Everyone knows that Bitcoin and other cryptocurrencies, especially Bitcoin (BTC), have been seen by many as anti-inflation assets. If the Federal Reserve is hesitant to cut rates due to stubborn inflation, it may instead highlight the logic of anti-inflation assets like Bitcoin in the long term. However, in the short term, the market mainly speculates on expectations. Every word from Powell's mouth on Friday night will be crucial. If he reveals even a hint of strong concern about inflation reigniting, or suggests that rate cuts need to wait a bit longer, market sentiment may instantly cool down. So, at 10 PM on Friday night, remember to set up your little stool and keep a close eye on Powell's words, as this directly affects which way the market winds will blow in the coming period.
