By making interest statements, the Fed President made the statement that the traditional markets and crypto market all over the world have been waiting for. US Federal Reserve Chairman Jerome Powell says that Russia’s invasion of Ukraine has had an impact on the American economy as well as all its markets, and adds that it creates uncertainty on the American economy.
In addition, Powell states that they will increase interest rates in line with inflation, which is over 2%, and according to the strong labor market. In other words, the Fed chairman is giving signals that there will be a definite interest rate increase at the meeting to be held this month. Powell underlines that the rate hike is essential to the current economy.
Interest Rate Increase is at the Door!
In addition to all these, he states that they will reduce the balance sheet and states that this will increase gradually after the interest rate increase process. Powell argues that if supply problems decrease and demand moderates, inflation will gradually decrease. As reported in January 2022, US inflation had risen to 7.5%, and it was stated that this was the largest inflation rate in the last 40 years.
Now the traditional markets and the crypto market know that a definite and clear increase will come with this statement. The clear statement is planned to come on March 15-16.
Effect of Interest on Crypto
In the crypto market, February is seen as the month of recovery, and it is reported that the declines after the highest cryptocurrency values in November 2021 are gradually improving. The month of March is as important for the crypto market as it is for every market. After the improvements in February, both the Fed’s interest rate announcement and the outcome of the Russia-Ukraine war are eagerly awaited by everyone.
Experts say that after a possible big interest rate hike, the crypto market may be very affected and warn investors not to make aggressive investments until March 15-16. On the one hand, the Russia-Ukraine war continues and very strong sanctions are coming from the crypto market. In addition, experts say that with these sanctions, Russia’s resources may decrease and the war can only end like this. Therefore, experts are directing investors to more moderate and slow movements due to these two important developments. Investors should consider these developments, be patient, be aware that traditional markets are being tested by many factors, and therefore the volatility of cryptocurrencies increases.