In an awaited report, Federal Reserve Chair Jerome Powell recently addressed concerns about tariffs and their impact on inflation. In a still ongoing broadcast, Powell stated that the Federal Reserve’s role is to ensure price increases remain a one-time occurrence, not the start of ongoing inflation. He emphasized that while tariffs might cause a temporary rise in prices, their long-term effect will depend on various factors.
Key factors affecting inflation and economic outlook
Powell outlined three key factors that will determine the extent of inflationary pressure. First, he noted that the scale of tariff effects has been larger than initially expected, surpassing even the Fed’s most optimistic forecasts.
Second, Powell highlighted the time it takes for tariffs to influence inflation. A delay in these effects could lead to rising public and business expectations of higher inflation. Lastly, Powell stressed the importance of maintaining well-anchored inflation expectations to prevent persistent inflation.
Despite these uncertainties, Powell assured that the U.S. economy remains in a solid position. He pointed to a robust labor market, with employment near maximum levels. While inflation has decreased significantly, it remains slightly above the Fed’s 2% target. Powell reiterated that managing inflation expectations is crucial to avoid long-term inflation pressures.
What is the crypto market reaction after Powell’s remarks?
According to CoinMarketCap data at the time of writing, the crypto market has shown varied trends, with Bitcoin priced at $84,172.75, down by 0.21%. Ethereum, valued at $1,570.07, has dropped by 2.52%. Solana’s price rose by 0.19%, reaching $127.97. XRP experienced a decrease of 1.08%, settling at $2.0895.
The Fear and Greed Index stands at 29, indicating fear in the market. The Altcoin Season Index is at 14, signaling that Bitcoin remains in the lead, with altcoins showing limited dominance. The CoinMarketCap 100 Index is priced at $161.14, a slight increase of 0.20%.
The total market cap of cryptocurrencies is $2.65 trillion, while crypto volume is $76.89 billion. The market during the last 30 days rose and fell gradually, with some days experiencing a high level of volatility. From the analysis, it is possible to identify a reserved attitude in the market, which is confirmed by the low value of the Altcoin Season index and a decline in the market cap.
