Originally published on: November 15, 2024
Bitcoin experienced a nearly 3% drop in value following Federal Reserve Chair Jerome Powell’s remarks indicating that there may not be an immediate need for further interest rate cuts. This unexpected statement from Powell diverged from predictions in both the cryptocurrency and broader financial markets.
During a speech in Dallas, Texas, Powell stated, “The economy is not sending any signals that we need to be in a hurry to lower rates.” This comes after recent rate cuts of 50 and 25 basis points in September and November, respectively. The next Federal Reserve interest rate decision is scheduled for December 18.
Powell emphasized being cautious and attentive to economic data in determining future rate adjustments, with the policy rate contingent on evolving economic circumstances. Following his speech, Bitcoin’s price dipped by 2.79% to $86,979 before recovering to $88,100.
Traders are now less optimistic about a potential December rate cut, as the likelihood has decreased to just 59%. This shift in sentiment has caused some to comment on the reversal of the “Fed pivot.” With decreasing odds of a rate cut, investors are keeping a close watch on how this may impact various asset classes, including Bitcoin and tech stocks.
Recent US inflation data slightly surpassed market expectations, easing pressure on the Fed to adjust rates. Alongside this data, concerns about the implications of certain economic policies, particularly those related to tariffs and trade wars, are also influencing market dynamics.
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