Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert & block trade
Convert crypto with one click and zero fees
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Crypto Market Dips After Fed Chair Powell’s Rate Cut Caution

Crypto Market Dips After Fed Chair Powell’s Rate Cut Caution

CryptotaleCryptotale2024/11/14 22:23
By:Chris Murithi
Crypto Market Dips After Fed Chair Powell’s Rate Cut Caution image 0
  • Fed Chair Powell says no rush to cut rates, citing strong economic momentum.
  • Bitcoin drops nearly 3% as Fed hints at cautious approach to December rate cut.
  • Inflation and labor market data influence the Fed’s cautious approach to future rate cuts.

U.S. Federal Reserve Chair Jerome Powell said that there is no sense of urgency toward lowering the rate in the economy. Speaking at the Dallas event, Powell insisted the American economy is strong, and it can afford a more measured approach to the policy shifts. He added that inflation could be falling, and that is why a careful approach to changing the interest rates should be taken.

Bitcoin’s price dropped nearly 3% following Powell’s remarks. The crypto market reacted to Powell’s statement, with Bitcoin falling to around $86,979 before recovering slightly to $88,100. Many in the crypto community had expected a rate cut in December. However, Powell’s comments weakened confidence in this possibility.

Other major cryptocurrencies also experienced declines. Ethereum has fallen by 5.03%, dropping to $3,058. Binance Coin (BNB) slipped 2.5%, trading at $616 after Powell’s speech. Meme coins, such as Dogecoin and Shiba Inu, have recorded steeper losses, falling 7.36% and 4.5%, respectively. These declines mirrored the broader market reaction to Powell’s signal of delayed rate cuts.

Powell noted that recent economic data do not indicate a need to rush rate reductions and that the Federal Reserve will announce its decision on December 18. Currently, interest-rate futures markets show a 59% chance of a quarter-point cut at the December meeting, according to The Kobessi Letter.

The Federal Reserve has gradually lowered rates by 0.75 points since September, and the officials aim to bring rates closer to a neutral level, which is estimated to be below 4%. Powell suggested that the Fed may slow the pace of cuts as it approaches this neutral zone.

The U.S. inflation expectations remain the key area of concern for the Fed. The inflation figures released on November 14 revealed a bit higher PPI manufacturing for October of a 2.4% annual rise, which was slightly above the market expectations. According to Powell, the inflation measure should indeed keep falling, but the process could be unsteady.

The labor market, another crucial factor for Fed decisions, has shown signs of cooling under restrictive monetary policy. Powell described the labor market as solid but moderating. He noted that inflation, though down from 2023 peaks, has shown mixed progress in recent months. The Fed’s preferred inflation gauge, excluding food and energy, increased 2.8% year-over-year through October.

Powell chose to remain silent over the effects of the changes in government policies from President-elect Donald Trump and Republican-dominated Congress. He said it is too early to determine how such changes may affect economic growth and interest rates. Powell concluded that the Fed will make further adjustments gradually as they wait for new data.

The post Crypto Market Dips After Fed Chair Powell’s Rate Cut Caution appeared first on CryptoTale.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like