During the National Association for Business Economics (NABE) Annual Meeting in Nashville, Federal Reserve Chair Jerome Powell highlighted the robust performance of the U.S. economy over the past two years. Powell noted significant progress, particularly in addressing inflation, which has been a major concern. With inflation now cooling down, the Federal Reserve is more confident in achieving its 2% target.
Two More Rate Cuts This Year, Says Powell
Powell emphasized that the Federal Reserve is not in a rush to aggressively cut interest rates. Instead, they are considering smaller, incremental rate cuts to ensure a balanced approach to economic growth. Powell mentioned that there are likely to be two more 25 basis points (bps) rate cuts this year.
This cautious approach aims to support economic growth without triggering inflation or other potential risks. However, Powell underscored that future rate cuts would depend on incoming inflation data. The Fed plans to evaluate the economic situation at each meeting, signaling Powell’s confidence in the economy’s direction.
Moreover, Powell assured that if inflation data shows sustained improvement, the Fed would not hesitate to cut interest rates further to bolster economic growth. This flexibility indicates the Fed’s commitment to maintaining economic stability.
Crypto Market Overview
Powell’s optimistic stance during the NABE Annual Meeting could have positive implications for the crypto market. Despite this, the market is not currently experiencing a price surge in major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB). According to CoinMarketCap data, BTC, ETH, and BNB have seen price declines of over 3.5%, 2.2%, and 4.35%, respectively, over the past 24 hours.
This recent price decline is attributed to the ongoing bearish sentiment among traders and investors, rather than the outcomes of the recent Federal Reserve meeting. Despite the bearish market sentiment, the Crypto Fear and Greed Index currently stands at 61, indicating a level of greed in the market. This index has been steadily rising since the beginning of September 2024, suggesting a potential shift in market sentiment.
As the Federal Reserve continues to monitor and adjust interest rates based on inflation data, the crypto market may experience fluctuations. Investors and traders should stay informed about economic indicators and Federal Reserve policies to make well-informed decisions.
