The newly announced US Fed inflation policy will ultimately benefit the crypto industry as per Ripple CEO Brad Garlinghouse. In his latest speech, the Fed Chairman Jerome Powell has said that inflation rising beyond 2 percent is certainly a comfortable scenario. After years of low-interest rates, such a rise can have a profound impact on the traditional financial realm.
As per Ripple CEO Brad Garlinghouse, the upcoming interest rate related US Fed inflation policy is sure to cause further US dollar debasement. The fall of dollar credibility will surely benefit crypto as the world will look towards alternate financial tools when centralized fiat declines.
Rising interest rate to mark a monumental shift in US Fed inflation policy
The interest rate policy of the US Fed is the most awaited policy decision throughout the world. On August 27, Chairman Jerome Powell said that interest rates will be kept lowered but the institution is comfortable with inflation going beyond the 2 percent mark.
Powell also mentioned that the Fed is now more focused on enhancing employment prospects in the US economy. It is working to create a policy that benefits low- and medium-income families.
As the Fed pursues an inflation stocking policy, the purchasing power of the US dollar will likely diminish. It means that safe-haven assets like gold and Bitcoin will subsequently benefit. As expected, Bitcoin price jumped slightly to touch $11,600 as Powell announced the latest policy measures.
Crypto to get an edge over fiat currencies after the Fed’s stance
Inflation is a double-edged sword that every central bank handles with care. Inflation must rise in unison with other factors like economic growth, employment, and salaries. However, the latest stance as seen in the US Fed inflation policy is likely to stoke fears of inflation. In case the inflation rises quickly, it can reverse all the gains made by an ultra-low interest policy stance taken by the fed in the last few years.
Brad Garlighouse of Ripple thinks that the inflation stoking policy will certainly favor the crypto industry. Investors looking to preserve their wealth due to a weakening dollar will prefer to buy Bitcoin. He tweeted that the Coronavirus pandemic is turning the tables on traditional finance and breaking set precedents. The debasement of the US dollar will lead to a strong crypto industry.