The President of the Federal Reserve, Jerome Powell, reiterated that interest rates will remain high to counter inflation.
Jerome Powell’s Statements and Market Expectations
During a discussion at the Canadian Economic Forum in Washington, Powell stated that interest rates will need to stay high for longer, confirming the market’s general sentiment.
According to Powell, recent data shows solid growth and continued strength in the labor market, but also a lack of additional progress this year to reach the 2% inflation target.
Expectations of a rate cut in June were thwarted by the recent announcement of higher than expected inflation. The market now faces the possibility of only two (or less) rate cuts in 2024, contrary to initial expectations of seven cuts earlier this year.
Bitcoin and Ethereum’s Decline
The crypto market continued its decline on Tuesday, while stocks experienced a modest rebound following robust U.S. sales data released on Monday.
Bitcoin and Ethereum prices each dropped by about 1% on Tuesday, erasing the slight gains from the previous day. At the time of publication, Bitcoin was trading between $62,000 and $63,000, seemingly heading towards its next halving, scheduled for the end of this week, in negative territory.
