In a recent speech , U.S. Federal Reserve Chairman Jerome Powell expressed a candid view on the current economic situation, emphasizing caution in the face of interest rate cuts. Despite some optimistic trends in the market, Powell emphasized the ongoing fight against inflation and the Fed's commitment to rigorous policy.
( The Federal Reserve released a dove, U.S. stocks closed up across the board, and Bitcoin hit 38K )
Powell: We will stick to principles in fighting inflation
Powell said in a recent speech that it is too early to be sure that inflation has been defeated.
The Fed's goal of controlling inflation back to 2% remains a priority, and Powell said he is prepared to tighten further if necessary. Although acknowledging the limitations of current policies, it still emphasized that the risk of doing too much or too little on inflation measures has now reached equilibrium.
Market reacts optimistically, Bitcoin rises
Markets reacted positively to Powell's comments, with Wall Street notably higher and Treasury yields falling. LPL Financial interpreted its comments as dovish. The Federal Reserve has implemented a series of aggressive interest rate hikes since March 2022, affecting economic activity. This time, the market's interpretation of Powell's remarks has deepened confidence in suspending interest rate increases.
The Bitcoin market also showed optimism, once reaching 38999:
Reality: Inflation target still not achieved
The Fed's focus remains on dynamic economic conditions post-pandemic. Recent data shows that inflation remains above the Fed's target, despite trending toward the 2% target. Facing the highest inflation rate since the early 1980s, the Federal Reserve has actively responded through a series of interest rate hikes, raising policy rates to the highest level in more than two decades.
