Jerome Powell’s recent statements did not shock the markets as anticipated, following the decline of DeepSeek. Investors were relieved as the feared scenario did not materialize. The drop in technology stocks could have intensified if Powell’s remarks had been more severe. What does the current situation indicate for cryptocurrencies?
Powell and Cryptocurrencies
A key takeaway from Powell’s comments was that expectations for continued interest rate cuts should not rely on a dip in inflation to 2%. He hinted that indications of falling annual inflation or weakness in employment could heighten expectations for rate cuts. If we see favorable surprises akin to recent core inflation data, market expectations for cuts this year could increase.
On another front, Trump’s initiatives to curb inflation have begun to lower energy prices, anticipated to reflect in monthly inflation rates. Additionally, Powell’s tone towards cryptocurrencies has become more moderate compared to his previous strategic Bitcoin
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