Jerome Powell, the Jackson Hole speech by Federal Reserve Chairmen led to a drop in the prices of Bitcoin (BTC) and Ethereum (ETH). The price of BTC fell by 1.83 percent, while the price of ETH was down 1.80 percent in Powell’s speech.
Powell began his speech by highlighting the need to bring inflation back to the goal of two percent. He emphasised the importance of price stability in the economy and the role of Fed in it. According to him, high interest rates, slow growth, and soft labour marker conditions might bring down the inflation rates.
According to inflation data released earlier this month, the crypto market experienced a short rally, which came as a relief to crypto traders after a tough time due to high market volatility. This decline after the speech could be related to the unfavorable macroeconomic factors of the crypto industry.
Powell in the Jackson Hole speech said “Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth.”
slow US economy
Powell pointed to a slowdown in the US economy after its historic growth rate in 2021. Growth in 2021 indicated a resumption of the economy after experiencing a slowdown during the pandemic.
He said that even though the economic data might not reflect it, the economy has a strong underlying momentum. “The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers.”
While the fall in the price of BTC and ETH after the Fed Chairs speech affects the price movement of other cryptocurrencies as well. Currently, BTC is down 1.94 percent and ETH 4.16 percent over the past two hours.
