The president of the Federal Reserve, Jerome Powell, reiterated on Tuesday the delicate balancing law of the Central Bank, emphasizing that the political leaders are trying to navigate between their price stability and the employment mandates after the reduction of the interest rate of last week.
“Recent data show that the rhythm of economic growth has moderated,” Powell said in comments prepared at the economic lunch of the Chamber of Commerce of the Great Providence in Rhode Island, adding:
The unemployment rate is low but has risen. Labor gains have slowed down and downward risks for employment have increased. At the same time, inflation has recently increased and remains somewhat high.
He added that the clearest commercial policy means that tariffs will probably trigger only a “unique transfer” effect on inflation. That can be interpreted as a slight change in previous warnings that tariffs could feed more sustained cost pressures in the second half of the year.
His comments echoed those of Vice President Michelle Bowman, who told the annual convention of the Kentucky banker association on Tuesday: “The economy of the United States has been resistant, but I am worried about weakening in the conditions of the labor market and the softest economic growth.”
Powell warned that there is no risk -free route for interest rates, with high inflation on one side and increased unemployment in the other. However, he suggested that the Fed is increasingly inclined to prioritize its job mandate.
The Federal Open Market Committee (FOMC) voted last week to reduce interest rates at 25 basic points, the first cut in nine months and a movement widely expected by markets. While Powell declined to comment on the probability of another reduction in October, expectations are high that the Fed will cut into its two final meetings of 2025.
DBS Bank in Singapore described the latest Fed meeting as full of “dissonance and contradictions”, citing inconsistencies between the economic projections of policy formulators and Powell’s comments.
The Bank said officials predict faster GDP growth and lower unemployment, even when they recognized “downward risks for employment.”
Related: Bitcoin fights $ 113k while Fed Bowman suggests faster rates cuts
Bitcoin, Crypto Markets under pressure
The expectations of additional monetary flexibility have raised the risk assets, but the cryptography markets faced a fresh sales pressure to start the week.
The divergence between Bitcoin (BTC) and the actions was marked by the market commentator, the Kobeissi letter, which aimed to expand the gaps in multiple kinds of assets.
The analyst Heisenberg added that Bitcoin’s wide divergence of Nasdaq will probably converge again, citing historical trends, a sign that BTC could quickly recover with the recent maximum of all Nasdaq.
Other indicators suggest that Bitcoin’s correction can be short. Coinshares reported Monday that the funds quoted in Bitcoin Exchange attracted $ 977 million in tickets last week, raising total cryptography tickets to $ 1.9 billion, a sign of sustained institutional demand even when the profit margins remain under pressure.
Economist Timothy Peterson told Cointelegraph that Crypto’s trajectory could rise much more once investors comprise the scale change in the ongoing policy of the Fed.
“There has never been a gradual reduction in rates like the one he currently imagined,” he said, adding that any more aggressive decrease sign could “shake Bitcoin and altcoins substantially.”
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