Jerome Powell, the Chairman of the Federal Reserve, confirmed that it is too early to determine the most appropriate direction for monetary policy, indicating that tariffs may contribute to rising inflation rates in the coming periods. He clarified that the Federal Reserve is in a good position and is waiting for more clarity before making any decisions regarding monetary policy adjustments, while ensuring that price increases do not turn into sustained inflation.
Powell indicated that most long-term inflation metrics remain strong, despite a state of uncertainty that may lead to risks of rising unemployment and inflation. He also affirmed that the economy is still in good shape and that tariffs may lead to a temporary rise in prices.
In another context, Powell predicted that the Fed would see two interest rate cuts during 2025, emphasizing the importance of independence in decision-making to ensure economic stability. He confirmed that markets are waiting for monetary clarity from the Fed to make their decisions.
Coinciding with Jerome Powell's speech, financial markets experienced a notable decline, while Bitcoin maintained its relative stability. This may indicate a shift in investor behavior towards Bitcoin as a safe haven. If this trend continues, it could indicate the maturity of the digital market, but caution should be taken regarding future market volatility.
What do you think? Please share your predictions about what is coming in the comments..;!
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