Jerome Powell Press Conference: Fed chair Jerome Powell said in his opening remarks at the FOMC Press Conference that the committee is committed to the 2% inflation target. Powell said price stability is the bedrock of the economy. Ongoing increases will be appropriate to return inflation rate to 2%, he said. This is in the context of not taking decisions prematurely in favor of loosening policy.
The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done, Powell said. In reaction to Powell’s comments, the crypto market turned red with around 1% drop in Bitcoin and Ethereum prices.
Fed Actions Taking Time To Realize
The Fed chair said it would take time to realize the effects of its tightening actions. “We will stay the course until the job is done,” he added. The Fed chair added that although inflation moderated recently, it remains too high currently. Acknowledged that the overall sentiment is encouraging, he said more proof is needed to be confident of a cut down in inflation.
“While recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path.”
The US Federal Reserve announced a 25 bps interest rate hike in February, a decision that could be seen as a slowdown in its effort to curtail inflation. However, the central bank said further rate increases are in store in the coming months, keeping traders guessed about when a Fed pivot would arrive.
The U.S. Dollar Index (DXY) recovered slightly from its earlier losses following the rate hike decision on the expected lines. Meanwhile, the crypto market reacted positively to the interest rate hike decision. As of writing, BTC price stands at $23,192, up 0.49% in the last 24 hours. The US Dollar Index is currently at 101.85, down by 0.24%.