Powell Testimony Mixed, Crypto Market Sentiment Affected!


"Hey Powell, you can't just talk straight, it's fun to talk in circles."

The crypto market is preparing to receive an impact whether positive or negative when Federal Reserve (Fed) Chairman Jerome Powell's testimony in Washington D.C last night said interest rate cuts will happen this year but still gauge inflation before deciding on the reduction.

Due to the unclear statement, the NFP employment data on Friday will serve as a key indicator in determining the actions the Fed will take in the future.

Powell also said that the United States (US) economy is no longer in recession, however it is still unknown when the Fed will lower interest rates and support current growth.

Concerns in the crypto community also increased as Powell warned against any timeline for interest rate cuts as the presidential election year approached and the Fed did not want to ease credit conditions too early.

So here it can be seen that Powell's speech did not highlight anything new that the Fed did not release in the minutes of its meeting following that the Fed remains cautious about inflation and will not rush to lower interest rates.

The commentary has weighed on crypto market sentiment since last December, there was high confidence that a rate cut would happen as early as March 2024 but now there is a 95% probability that the Fed will not cut.

As such, investors may stick with traditional assets for a while as the Fed's decision to hold off on interest rate cuts has left the crypto market poised to be in a volatile movement.

Even so, purchasing power usually persists in a positive economy and risk investments are preferred, so the crypto market will likely continue to move higher regardless of the Fed's decision.