The BTC rate reacts to the speech of US Federal Reserve Chairman Jerome Powell in Congress with an increase of 1.6%. They warned that there might be increased volatility during his speech. But in fact the movements are modest. At least for now.

The official appears before the US Senate Banking Committee with a report on monetary policy.

Main points: 

- Inflation has decreased markedly over the past couple of years, but is still above the target of 2%.

- Restrictive monetary policy helps reduce inflation.

- It is not advisable to cut interest rates until the Fed is confident that inflation is steadily moving towards 2%.

“We have made significant progress towards the goal, but recent monthly figures indicate modest further progress.” 

- Data for the first quarter did not confirm confidence that inflation will not rise.

- Obtaining new good macro data will strengthen our confidence in the inflation trajectory towards 2%.

- It is unlikely that the next policy step will be a rate increase.

- A premature or too strong rate cut could slow down or even neutralize the progress we have seen in reducing inflation. It can also lead to an unjustified weakening of the economy and labor market. 

- Increased inflation is not the only risk we face. 

- The risks of achieving employment and inflation targets (the so-called dual mandate - approx.) are becoming more balanced.

- The US economy continues to grow at a strong pace.

- The unemployment rate has increased but remains at a low 4.1%.

- Labor market conditions have returned to pre-pandemic levels. It's strong, but not overheated.

- GDP growth slowed in the first half of this year, having shown impressive growth in the second half of last year.

Powell’s speech is still ongoing, but the abstracts of his speech have already been published on the US Federal Reserve website. The theses are generally “dovish”. At least he does not scare the markets by lowering the interest rate only in 2025. Plus, there are assurances about the low probability of an interest rate increase (although the market is not expecting it at all).