The bitcoin dropped nearly 3% after the U.S. The Federal Reserve suggests that additional interest rate cuts might not be coming up. This statement comes against the expectations of those who are in the market of cryptocurrency and broader financial sectors.
The Federal Reserve Chair Jerome Powell in his speech in Dallas, Texas on November 14, remarked that there are no indications from the economy that forces them to rush into lowering the rates. This statement by Powell came after two recent interest rate reductions in September and November of basis points 50 and 25 respectively. The next interest rate decision of the Federal Reserve is scheduled to be announced on 18th December.
Further adding to his statement, Powell said that the current strength they see in the economy allows them to make their decisions carefully. Eventually, the incoming data and the evolving economic outlook are going to affect the trajectory of the policy rate.
As per reported by CoinMarketCap, soon after remarks made by Powell, the price of bitcoin fell approximately 2.79% to $86.979 whereas by the time of publication, the price bounced back to $88,100.
On the same day, U.S. inflation data also surpassed market predictions slightly, an annual increase of 2.4% just above the 2.3% consensus reported by the Producer Price Index (PPI) in October.
The entire situation is being watched by the Bitcoin enthusiasts closely as the interest rates are important indicators for them, they are acutely aware of the potential cut rates by the Federal Reserve. Since lower interest rates make safer assets like term deposits and bonds less appealing, this prompts the investors to explore other riskier alternatives including Bitcoin and technology stocks providing them a deeper insight into investing.
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