Home Markets Crypto Market Suffers After Powell Says The Fed Needs To Use Its Tools “Most Powerfully” To Curb Inflation

Crypto Market Suffers After Powell Says The Fed Needs To Use Its Tools “Most Powerfully” To Curb Inflation

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Crypto Market Suffers After Powell Says The Fed Needs To Use Its Tools “Most Powerfully” To Curb Inflation

Earlier today (August 26), Federal Reserve Chairman Jerome Powell delivered a keynote speech at the 2022 Economic Policy Symposium, being held (August 25-27) in Jackson Hole, Wyoming and is hosted by the Federal Reserve Bank of Kansas City.

In a speech titled “Monetary Policy and Price Stability,” Powell said:

The overriding objective of the Federal Open Market Committee (FOMC) is currently to bring inflation back to our 2% target. Price stability is the responsibility of the Federal Reserve and is the foundation of our economy. Without price stability, the economy does not work for anyone…

Restoring price stability will take time and requires vigorous use of our tools to better balance supply and demand. Reducing inflation will likely require an extended period of below-trend growth. In addition, there will most likely be an easing of labor market conditions. Although higher interest rates, slower growth and looser labor market conditions will reduce inflation, they will also cause hardship for households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.




The target range increase in July was the second 75 basis point increase in as many meetings, and I said then that another unusually large increase might be appropriate at our next meeting. We are now about halfway through the interim period. Our decision at the September meeting will depend on the totality of incoming data and the evolution of the outlook. At some point, as the monetary policy stance tightens further, it will likely become appropriate to slow the pace of increases.

Powell’s hawkish tone shows traders were right to be concerned about today’s speech. Currently (as of 15:43 UTC on August 26), US stocks are struggling today, with all four major US equity indices in the red:

The crypto market is doing even worse today, with Bitcoin ($BTC) trading around $20,764 (-3.51%) and Ethereum ($ETH) trading around $1,590 (-6.04 %).

Here’s what prominent macroeconomist and crypto analyst Alex Krüger said about Powell’s speech:

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