Speech by Jerome Powell: Federal Reserve Chairman Jerome Powell said the FOMC wants to send the message of the disinflation phase, although the process is still in its infancy.
He added that the Fed was considering raising rates to control inflation. When asked if the FOMC would have raised rates by 25 basis points if it had seen the data in the jobs report, he said the Fed’s position was that rate hikes were appropriate. Jerome Powell said that the goal of bringing inflation down to 2% would be maintained and that 2023 could see a significant reduction in inflation.
He added that the process would take quite a bit of time. He added that the Fed would certainly raise rates further if the data continues to be stronger than expected. Markets reacted positively to the Fed chairman’s comments, with the S&P 500 Index rising 0.65%. While the price of bitcoin is up 0.50% in an immediate reaction.
The crypto-currency market reacted positively with a rally to the Fed Chair’s comments. As of this writing, the price of bitcoin (BTC) stands at $23,284, up 1% in the last hour.
Jerome Powell spoke during an interview with David Rubenstein, co-founder of The Carlyle Group, at the Economic Club of Washington DC on Tuesday. Against the backdrop of the Federal Reserve’s recent policy decisions to raise interest rates and its goal of controlling inflation, Jerome Powell’s comments were closely scrutinized by the market. Traders were not only looking for the Fed’s outlook for the coming months, but also for the unprecedented growth in the job market reported by the U.S. Bureau of Labor Statistics last week.
With total nonfarm employment up by 517,000 in January, the U.S. unemployment rate fell to 3.40 percent. This is actually the lowest unemployment rate in the country in about 54 years. At his post-FOMC press conference on February 1, the Fed chairman said the committee was committed to bringing inflation back toward the 2 percent target.
Prior to Jerome Powell’s speech today, the crypto market showed few signs of volatility, with the price of bitcoin (BTC) largely unchanged over the past 24 hours. For most of the day on Tuesday, the price of BTC remained fluctuating around the $22,950 level in anticipation of the Fed Chairman’s comments.