The Fed’s movements, which are closely related to commodity, stock and cryptocurrency markets, directly affect the price. Today, Fed Chairman Powell made important statements about the meeting in May. Addressing the current economic outlook, the president gave important signals about the steps that the Fed should take. So what awaits us at the May meeting?
Today at 20:00 Powell attended the IMF panel discussion on the global economy. Speaking about the steps that the United States should take in the economic sphere, the Fed Chairman paid special attention to the conflicts in Ukraine. The headlines of the speech are as follows:
We will experience the consequences of the war as upward inflation.
The US economy is further from the indirect consequences of the war in Ukraine than other countries, but over time these consequences will intensify.
My goal is to reduce inflation without a recession.
We will do everything possible to gently reduce inflation.
Many Fed members want more than one 50 basis point rate hike.
The markets are responding adequately to our messages.
At the meeting in May, the issue of raising the rate by 50 basis points will be discussed.
In my opinion, we need to move a little faster, the conditions seem suitable for this.
Bitcoin and Altcoins
With the statement made today by Yellen that “cryptocurrencies can violate the embargo,” Bitcoin has lost its strong position above $42,000. The statements made by Powell at 8:00 p.m. ensure that the price remains below $42,000. At the time of writing, Bitcoin finds buyers at a price of $41,700. A loss of $41,500 in the short term could cause the $39,000 levels to reappear. The Fed will hold its next meeting in the first week of May, and there will be a definite increase in the interest rate, it seems that the cryptocurrency markets have estimated an increase of 50 basis points. In fact, there was no sharp, big drop in the final price due to the rhetoric of 50 bp.
The main problem may arise at the meeting in May, in terms of reducing balance sheets. If the Fed wants to act quickly, it will make clearer statements about reducing balance sheets at the next meeting. In the interests of investors in cryptocurrency, it will act taking into account both the position of the Fed and the tension in Ukraine.