According to U.Today, Jim Cramer, the host of CNBC's Mad Money, recently commented on Federal Reserve Chair Jerome Powell's statements from the recently concluded two-day Fed meeting. Powell suggested that a hike in interest rates is unlikely to be the Fed's next move. He stated that officials would need compelling evidence that the current policy is not stringent enough to bring inflation back to its 2% target. Cramer advised investors to trust Powell's hint that a rate hike is improbable, despite ongoing inflation.
Cramer's comments came after Powell's remarks temporarily eased the markets. However, Cramer also warned that investors might become anxious again as job data, which could provide more insight into whether the economy is slowing or accelerating, is set to be announced on Friday. Despite Powell not indicating that rate cuts were likely this year or that rates were at a peak, Cramer stated that the Fed chief had managed to remove 'the dreaded rate hike scenario' from consideration.
Cramer's predictions, particularly in the cryptocurrency market, have often been contrary. This raises questions about the implications of recent macroeconomic developments for cryptocurrencies. Historically, Bitcoin has seen four declines in April over the last decade, three of which predicted May losses of 18% on average, according to Bloomberg data. However, if inflation pressures ease and markets anticipate a more relaxed Fed stance, cryptocurrencies and other speculative assets may find some relief.
The Fed has kept interest rates steady in the 5.25%-5.5% range for almost nine months, and Powell's comments did not suggest that the central bank is planning to lower rates soon. It is rare for interest rates to remain stable for more than a year. Consequently, the delayed impact of prolonged higher rates remains a concern for risk assets like cryptocurrencies. This could be a tail risk that might deter bullish investors.
