Jerome Powell Condemns Reasons Affecting Economy; Does It Include Crypto Market?

• The inflation rate is far above objectives and is still too high.
• Interest rates may not need to be as high to keep inflation under control.

Jerome Powell, the Federal Reserve Chairman, stated that the central bank is strongly committed to returning inflation to the 2% goal. And the failure could cause greater harm to the economy. The statement raises the question of whether the failure also harms the crypto market. 

On May 19, while speaking at the monetary conference in Washington, D.C., the Federal Chairman noted that the FED’s interest rates may not need to rise as much, and the extent of that is highly uncertain. Moreover, the recent problems at the Silicon Valley Bank and others continue to have serious effects on the economy and the crypto market.

Powell’s Decision to Pause Interest Rate Hike

Powell mentioned that inflation is far above objectives and is still too high and many people were witnessing high inflation for the first time. He added that interest rates may not need to be as high to keep inflation under control due to the banking sector’s stress. Moreover, the aftereffects of the banking sector crisis take some pressure off the U.S. Central Bank to raise interest rates.

Powell gives a strong signal that the bank is pausing the interest rate hike for the next month. And he added that the tighter conditions could mean the policy high will be lower. The officials raised the interest rate by a quarter percentage point earlier this month. This results in a target range of 5% to 5.25%. 

The last time the Fed raised interest rates, it had a massive impact on the crypto market. Investors expect that the Fed’s decision to pause the interest rate hike may end positively for the crypto market.