Summary:
•Fed Chairman Jerome Powell dismissed concerns about a recession, citing strong economic data.
•Core PCE rose 2.8% and headline inflation was 2.5%, in line with Powell's forecast.
• Growing interest in Bitcoin as a hedge against the U.S. dollar amid fiscal policy uncertainty.
Federal Reserve Chairman Jerome Powell reassured the nation that fears of a recession are firmly at bay, while Bitcoin gained ground as a hedge.
Powell's confidence comes from analyzing current economic data and trends, divorced from the political influences that often cloud economic forecasts. The assertion comes amid growing skepticism about the role of monetary policy in ensuring long-term economic stability.
A recession is unlikely this year
JPowell's statement is consistent with his previous remarks, emphasizing the Fed's commitment to data-driven decision-making.
Excluding volatile food and energy costs, core personal consumption expenditures rose 2.8% over the past 12 months. At the same time, the overall inflation rate was 2.5% compared with the previous year. Powell said this was in line with his predictions and it was encouraging to see results that were in line with expectations.
Powell's optimism, acknowledging that the risk of a recession is low, reflects a pragmatic view of the economy. Additionally, he downplayed the possibility of lowering interest rates before "the Federal Open Market Committee is convinced that sustained inflation will fall to 2%."
"Growth is strong. As I mentioned, the economy is in good shape. There is no reason to think the economy is in recession or on the verge of recession," Powell said.
This view shifts the focus towards the structural elements of economic growth and away from the short-term effects of monetary adjustments.
While Powell insists a recession is unlikely this year, Bitcoin has benefited from an uncertain fiscal and monetary policy environment.
Jason Trennert, CEO of Strategas Research Partners, attributed this to recent regulatory developments and the growing demand for alternatives to traditional fiat currencies. The approval of a Bitcoin ETF and the simultaneous rise in gold prices reflect a collective hedge against a depreciating U.S. dollar.
"In the U.S., there's really no coordination between fiscal policy and monetary policy when it comes to inflation," Trennert explained. "I think people are looking for a hedge against fiat currencies, especially the U.S. dollar. So I think it's people looking for alternatives. Another reason why these alternatives are traditionally considered legal tender.”
With Powell firmly at the currency's helm, discussion surrounding Bitcoin's viability as a safe haven intensifies. Bitcoin’s role as a potential bulwark against fiscal instability is increasingly under scrutiny as the United States grapples with a ballooning national debt and looming debt terms that are being reassessed. #美联储 #通胀工具