Recent comments made by Jerome Powell have generated a calm response from markets, particularly following the unforeseen downturn of DeepSeek. Investors expressed relief as their worst fears failed to materialize, and the anticipated decline in technology stocks could have worsened had Powell delivered a more alarming message. This raises questions regarding the implications for the cryptocurrency market.
What Did Powell Say About Cryptocurrency?
Powell emphasized that expectations surrounding further interest rate reductions should not solely hinge on inflation falling to 2%. He suggested that signs of declining inflation or weakness in employment trends might boost rate cut anticipations. Positive surprises similar to recent core inflation data could lead to heightened market expectations for cuts later this year.
How Are Economic Conditions Changing?
Powell remarked that current interest rates are significantly less constrictive than those prior to last year’s cuts and reiterated the need for a cautious policy approach. He expressed optimism about an ongoing decline in inflation in the upcoming months.
Richard Clarida, Powell’s former deputy, pointed out that the recent meeting aimed to maintain options for minimal action by 2025, which has been successfully achieved. The easing of a previously strict stance is proving beneficial for cryptocurrencies, suggesting that any hardships are already factored into current prices.
- Possible interest rate cuts could surface by May if inflation data improves.
- The cryptocurrency market’s total valuation has risen to $3.53 trillion, with trading volumes surpassing $100 billion.
- Ethereum (ETH) remains near $3,100, while some experts predict that Bitcoin (BTC) crossing $104,000 could indicate new peaks.
The markets appear to be stabilizing following Powell’s insights, leading to a cautiously optimistic outlook for both traditional finance and the burgeoning cryptocurrency sector.
