See More

Fed Chair Jerome Powell Resumes Hawkish Outlook as Geopolitics Test Fed Resolve

2 mins
Updated by Geraint Price
Join our Trading Community on Telegram

In Brief

  • Jerome Powell, Federal Reserve Chair, confirms the bank's commitment to combating inflation by increasing US interest rates.
  • Despite initial decline, rising shelter costs could impact future rate decisions as the Fed aims to bring inflation back to 2%.
  • Amid geopolitical forces and technological advancements, experts suggest the Federal Reserve's model may require revision.
  • promo

Federal Reserve (Fed) chair Jerome Powell confirmed the bank will continue fighting inflation by increasing the US interest rate. Powell was speaking at the Jackson Hole Symposium in Wyoming. According to Bloomberg, the central banker’s speech was tinged with a hint of hawkishness.

“We will proceed carefully,” Powell said of the decision to raise or pause interest rates. He added that food and energy prices remain volatile and that inflation remains too high despite progress in the last 17 months.

Bitcoin Spikes as Central Bank Targets Softer Economy

“Although inflation has moved down from its peak – a welcome development – it remains too high.”

To get inflation back to 2%, the economy will need to undergo a period of sustained below-growth trend and a softer labor market, Powell said. Despite an initial decline, the cost of shelter is rising, which could affect future rate decisions.

“Given how far we have come, at upcoming meetings, we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks.” 

Want to learn how to be immune to the Fed’s inflation policy? Find out here how cryptocurrencies can help.

Stocks rose ahead of Federal Reserve chairman’s speech.

Fed interest rate sentiments on the current inflation situation see Bitcoin spike briefly.
Bitcoin spikes briefly after announcement | Source: TradingView

During Powell’s speech, the Nasdaq100 was up three-tenths of a percent while Bitcoin increased to $26,300 before falling back to just under $26,100. Ethereum (ETH) also increased to around $1,676 but dropped back to $1,661.23.

Analyst Says Future Fed Interest Rate Policy Decisions Will be Tricky

Earlier, analysts doubted the meeting would significantly alter investor sentiment. However, some noted the potential for positive outcomes.

Christopher Smart of an investment consultancy, the Arbroath Group, said recession threats have all but diminished as the economy prepares for a relatively soft landing. Interest rates have declined from 9% to 3% in 12 months, while employment is reaching its Goldilocks moment as job supply and demand slowly equalize.

He said questions remain on whether current market disruptions may require revision.  He argues that several geopolitical forces and technological advancements complicate the long-term outlook. 

The recent Russia-Ukraine war, the breakneck advancement of artificial intelligence (AI) technologies, and the threat of de-dollarization suggest the Fed’s model may be outdated and in need of revision.

“Today’s headlines suggest an extended battle to drive inflation back to the 2% target. But the truth is that there is more uncertainty than ever around whether the Fed should adopt a structural bias that leans against deflation or tilt fundamentally in a new direction.”

Other speakers at the event include the president of the European Central Bank, Christine Lagarde, and the governor of the Bank of Japan, Kazuo Ueda. In September, the Federal Reserve will vote on whether to increase or pause interest rates.

Got something to say about the Fed interest rate or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTokFacebook, or X (Twitter).

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024



In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...