Summary
- On Friday, Jerome Powell, the Chair of the US Federal Reserve, opened up about how the central bank is prepared to raise the benchmark rates even more.
- When Powell started talking, stock values didn’t change much. The Dow Jones Industrial Average, S&P 500, and Nasdaq were all doing well.
- Talking about Bitcoin’s price, it went down and is now below $26,000.
Bitcoin Price Reacts to Fed Chair Jerome Powell’s Remarks About Increasing Interest Rates
Fed Chair Jerome Powell made remarks on Friday indicating that the US Federal Reserve will continue raising interest rates in order to control inflation. The market reactions were mixed; stocks did not experience any significant changes while Bitcoin’s price dropped slightly below $26,000.
The Federal Reserve’s Plan for Controlling Inflation
In his speech at Jackson Hole Symposium event on Friday, Powell discussed how the central bank plans to reduce inflation back down to 2%. He hinted that borrowing costs may be raised further if necessary and noted that despite recent progress there was still much work left to do. His words caused a slight drop in Bitcoin prices as investors speculated higher interest rates would lead to lower demand for digital currencies.
Stock Market Reactions
Despite Powell’s statements regarding increasing interest rates, stock markets did not experience any major changes. The Dow Jones Industrial Average (DJIA), S&P 500 (SPX), and Nasdaq Composite (NQ) indices all closed at or near their opening values after his remarks. This indicates that investors are confident in the Fed’s ability to manage inflation without causing major disruptions in equity markets.
