The financial world, especially the crypto industry, is witnessing a surprising turn of events as the Federal Reserve Chair, Jerome Powell, hinted at the possibility of no further interest rates. The chair’s comments might have shown a new leap for the financial market as he suggested that there might not be any further spikes in interest rates in the future.
The announcement might have caused a ripple effect through the crypto market as a potentially significant development for both traditional and digital assets. This announcement was also cheered by the crypto community and met with open arms. In a chain of events, the crypto market is to profit from this and expects a bull run.
Crypto markets and the Fed’s interest rates
On Thursday late afternoon, Federal Reserve Chair Jerome Powell made some comments that hinted at no more future spikes in interest rates. The announcement has been met with a positive attitude and cheers from the digital community as the market gained a 3% rise over the last 24 hours.
The WSJ report indicated Powell’s comments came from the analysis of recent progress on inflation. The report analyzes the long-term implications of increased inflation that would mean the Treasury yields remain elevated, and the central bank might stop hiking interest rates.
Also, Powell’s sentiments align perfectly with comments made by fellow central bankers. They have also signaled their intentions to keep short-term interest rates unchanged in the scheduled meeting from October 13 to November 1.
The main reason behind their intentions is based on the uncertain economic market that has made it very challenging to find the higher and lower barriers in which the interest rates can be applied. As such, the central bankers have suggested maintaining the interest rates unchanged.
The Chair’s comments have boosted investor confidence and stated that the economic status of the US is still resilient despite facing global macro challenges. Powell also remarked on abating inflation, but the remarks were taken optimistically by Wall Street. This didn’t stop the crypto community from cheering.
Reasons for the crypto market cheers
The crypto market experienced a sudden rise of about 3%, with Bitcoin taking the lead with a similar rise. BTC shot up by 3.3 % and was shy of the $29,000 mark after the report. This indicates a move to the $30,000 mark in the coming future.
Also, according to online reports, BTC traders have been placing long positions based on Bitcoin’s recent data. Other cryptocurrencies also experienced a rise in price.
Altcoins like XRP have shown a spike in market value, as the cryptocurrency witnessed a 6% growth following its victory against the Securities and Exchange Commission. The SEC dropped the charges on XRP being viewed as a security and charges against Ripple executives on Thursday.
This has recorded an 8% spike to the $0.52 mark, now settled at $0.51. Its price is still set to increase as the crypto world just experienced a massive realization after the announcement by the Fed’s chair.
The absence of high-interest rate hikes is a signal of an ongoing economic stimulus. This also implies that bother is a loose monetary policy, and this welcomes a bullish trend for cryptocurrencies. Among the reasons why the crypto market is celebrating the news are lowered opportunity cost, inflation hedge, and positive sentiments of a conducive ambiance for cryptocurrencies.
It’s important to note that the announcement is just a tentative signal and not an official decision. The Fed’s monetary policy is influenced by a complex web of economic data and indicators which can change direction at any given time based on the economic conditions of the region.