Crypto Rally Incoming? US Inflation Cooling Down, Says Powell

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Federal Reserve Chair Jerome Powell, during the National Association for Business Economics (NABE) Annual Meeting, in Nashville, stated that the U.S. economy is doing well and has made notable progress over the past two years. However, inflation, which was a major concern is now cooling down and now giving the Fed more confidence that it’s on track to reach its 2% target. 

Two More Rate Cuts This Year, Powell

To achieve the target, Powell noted that the Fed is not in a rush to cut the interest rates aggressively. Instead, they may go with lower rates cut in small increments. The Fed Chair also stated that there will likely be two more 25 basis points (bps) rate cuts this year. Powell’s slower rate cut is to balance the economic growth without causing inflation or other risks.

However, the upcoming rate cut will depend on the incoming inflation data. During the meeting, he said that the Fed would evaluate the economic situation at each meeting, signaling Powells’ confidence about the economy’s direction. Meanwhile, Powell assures that if inflation data shows sustained improvement, the Fed won’t hesitate to cut interest rates further to support economic growth. 

Crypto Market Overview

Powell’s optimistic approach during the meeting could benefit the crypto market. However, at present, the market is not witnessing any price surge in any major cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB). According to CoinMarketCap data, BTC, ETH, and BNB have experienced a price decline of over 3.5%, 2.2%, and 4.35%, respectively, over the past 24 hours.

This price decline is not due to the recent FED meeting, but instead to the ongoing bearish sentiment among traders and investors.

Source: Coinglass

Despite the bearish market sentiment, the Crypto fear and greed index currently stands at 61, indicating greed in the market. Additionally, it has been continuously rising since the beginning of September 2024.