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The bitcoin price was affected after the comments of Jerome Powell, Chairman of the Federal Reserve Board

Source:

Yesterday, the Wall Street Journal summit was held, in which Fed Chairman Jerome Powell indicated that the US central bank will stick to its current monetary policy, despite indications that borrowing money is becoming more expensive for individuals and companies.

US stock prices were affected, and Bitcoin also did not deliver:

The Dow Jones Index is down more than 1% after Powell’s comments, and Bitcoin has dropped 5% in the past 24 hours.

Treasury yields continued to rise.

Jerome Powell’s comments come with the approaching spring season and the beginning of controlling the Corona virus through the increase in the spread of the vaccine, as people expect the economy to improve with the increase in the spread of the vaccine and the restrictions of the Corona virus, whether imposed by the government or self-imposed, begin to decline.

And the effect is not only in the short term, but in the long term as well.

Accordingly, as a result, the cost of borrowing money is rising as the demand for credit increases.

Treasury bonds are bonds that the federal government sells to investors, who mainly loan out government money for a small return.

Usually, as returns increase, this indicates that investors are becoming more confident in the economy as they are looking for investments that pay much more than the current rate of 1.55%.

Increases in yield also indicate that inflation may inevitably be coming.

However, the Fed has no intention of making a change, at least for now.

In this regard, Powell stated:

Today we are still far from our goals of maximizing employment and inflation at a rate of 2% over time.

The Fed will not try to cut yields by buying more Treasury bonds than it actually does.

He added:

The Federal Reserve will monitor interest rates.

If conditions change materially, the Fed is prepared to use the tools it has to advance the achievement of its goals.

Inflation is good for Bitcoin, as the Fed’s monetary expansion has been beneficial to Bitcoin, and cryptocurrency traders may have been hoping for more stimulus from the Fed from time to time.

More pumping was expected, but the Federal Reserve was satisfied with that for the time being, which reflected and affected Bitcoin’s performance.

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