Understanding the Ripple effect of Jerome Powell’s Federal Reserve Announcement on Crypto Prices 🔍
Following the recent Federal Reserve announcement by Chair Jerome Powell, Bitcoin, Ethereum, and Solana witnessed significant rebounds in their prices. The insights shared during the Federal Open Market Committee’s meeting seemed to have a direct impact on these digital assets. Let’s delve deeper into how Powell’s words influenced the crypto market:
Crypto Market Responds Positively to Powell’s Remarks 🚀
- Though concerns about inflation persist, the Federal Reserve opted to maintain the current benchmark interest rate, displaying a cautious approach towards potential rate hikes.
- Powell acknowledged the challenges in achieving the Fed’s 2% inflation target and emphasized the importance of data-driven decisions to ensure economic stability.
Key Points:
- The Fed’s decision not to raise interest rates in the near term boosted investor confidence in the cryptocurrency market.
- Bitcoin surged by 5% to $59,440, Ethereum climbed 5.02% to $3,015, and Solana experienced an 11% increase, reflecting positive market sentiment.
Strategic Moves by the Federal Reserve to Manage Market Volatility 📈
Additionally, the Federal Reserve announced a revision to its balance-sheet reduction plan, slated to begin in June. This adjustment aims to mitigate potential market volatility and ensure a smoother transition in the financial landscape:
- Starting June 1, the Fed will decrease the monthly runoff of Treasury securities to $25 billion from the previous $60 billion.
- While maintaining a $35 billion monthly runoff in mortgage-backed securities, the excess will be directed towards Treasuries, aligning with a strategic shift towards a more streamlined balance sheet structure.
Insights on Market Dynamics:
- Powell’s emphasis on monitoring inflation risks underscores the Fed’s commitment to a cautious policy approach, signaling potential implications for economic activities.
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