Home
News
- Fed chairman Powell addressed the current inflation phase in his annual speech at Jackson Hole.
- The measures of inflation will include increased interest rates.
- The speech by Powell affects the global and crypto market too.
Jerome Powell, who is the chairman of the Federal Reserve System (FED) addressed inflation. He also discussed the prior steps that would decrease inflation.
Powell’s Speech on Inflation
According to Powell, the current inflation rate in the U.S. is above 2%, which is a high number as he said. He describes that the global inflation rate is well above the U.S. The efforts by the governments to reduce inflation may include increasing interest rates and lessening labor conditions which may cause “some pain” to the economy.
He included in his statement, “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.”
Powell ensures the Federal Reserve System that it is ready to “use our tools forcefully” against inflation. As the inflation in the country suffers at its higher level in 40 years. He further pushed the businesses to accept current inflation and take the required steps to configure with the current market conditions.
The increased interest rate news affects the market. The U.S. stock market index, Dow Jones, and S&P 500 dropped by 611 points (1.85%) and 2.2% respectively, after Powell’s speech. While the U.S. stock exchange NASDAQ noted a loss of approximately 2.7%.
A massive price drop can be seen in the U.S. market including the leading firms like Microsoft, Tesla, Apple, and Amazon. These firms almost dropped by 4% in market capitalization.
Likewise, the Crypto market reacts in a similar manner to the stock market. The whole crypto market dropped from over $1 billion to $955 million right after the Powell speech. Coins that suffer more are OKB, Cosmos (ATOM), Nexo (NEXO), and Huobi Token (HT). These coins lost around 3%.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
