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Bitcoin Crash Is Nervous As Fed Chair Is Mildly Aggressive
President of the US Federal Reserve Jerome Powell’s speech reflected mildly hawkish comments on tight monetary policy and interest rate cuts against a backdrop of continued inflationary pressures and a strong labor market. Progress toward returning inflation to the 2% target this year has stalled as some raised concerns about stagflation, which were again denied by Powell.
He said the U.S. economy remained resilient amid the crisis strong job market. Speaking about inflation, he mentioned concerns about higher inflation in recent months, which previously caused the Fed to lose confidence rate cuts this year.
PPI inflation data is hot
THE US Bureau of Labor Statistics released the PPI Inflation data for April today, coming in hot. Monthly PPI rose 0.5% versus 0.3% expected. Monthly core PPI rose 0.5%, much higher than forecasts of 0.2%. Annual PPI held steady at 2.2% and annual core PPI rate rose to 2.4% from a downwardly revised 2.1%.
Jerome Powell said the Fed will continue to analyze next quarter’s economic data and fight inflation to reach its 2% target. denying any rate increase. Other Fed officials have been aggressive on rate cuts and have commented on smaller rate cuts this year.
Stock market reactions
Cryptocurrencies and stock markets remain under pressure as traders await the key IPC Inflation data will be released on Wednesday. The market expects annual CPI inflation to decline to 3.4% from 3.5%.
The US stock market opened flat as traders digest the new PPI data and await the CPI numbers for further indications of market trends. FedWatch tool for ECM shows a 49% chance of 25 basis point rate cuts starting in September, with further rate cuts expected in November and December.
The new inflation data caused US dollar index (DXY) to get down to 105 and the 10-year US Treasury bond yield it also fell by 4.471%. Since Bitcoin moves opposite to DXY and Treasury yields, a rise in both caused Bitcoin’s price to plummet to $60,000, triggering a cryptocurrency market sell-off.
The price of Bitcoin remains under pressure
BTC price It fell nearly 3% today, with the price currently trading near $61,200 again. The 24-hour low and high are $61,156 and $63,422, respectively. However, trading volume has increased by 11% in the past 24 hours, indicating an increase in interest among traders.
Altcoins, including Ethereum, BNB, Solana and Toncoin, fell 2-8% in the last 24 hours due to PPI inflation and Fed Chair Powell’s speech.
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