The Bitcoin market experienced a near 3% dip following remarks from Federal Reserve Chair Jerome Powell, who suggested that the central bank is in no hurry to reduce interest rates, despite expectations from crypto and financial market participants.
Bitcoiners keep a close watch
Speaking in Dallas, Texas, on Nov. 14, Powell stated, “The economy is not sending any signals that we need to be in a hurry to lower rates.” His comments follow two recent rate reductions—one of 50 basis points in September and another of 25 basis points in November. The next interest rate announcement is scheduled for Dec. 18.
Powell elaborated, “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully. Ultimately, the path of the policy rate will depend on how the incoming data and the economic outlook evolve.”
Following Powell’s statements, Bitcoin’s price fell by 2.79%, dropping to $86,979, according to CoinMarketCap data. However, it showed some recovery, climbing back to $88,100 at the time of writing.
Traders’ expectations for a December rate cut have diminished. “Odds of a 25 basis points rate cut are down to just 59%,” noted The Kobessi Letter in a Nov. 14 post on X. “The ‘Fed pivot’ is being undone once again,” the trading resource added.
Interest rates are an important indicator for Bitcoiners
For Bitcoin enthusiasts, interest rate movements are critical. Lower rates tend to reduce the appeal of traditional safe-haven assets like bonds, prompting investors to explore riskier alternatives such as Bitcoin and technology stocks.
On the same day, Nov. 14, inflation data from the U.S. slightly exceeded market expectations. The October Producer Price Index (PPI) showed a 2.4% year-on-year increase, slightly above the forecasted 2.3%. While marginal, this could be another reason for the Federal Reserve’s cautious approach to further rate adjustments.
The economic landscape is further complicated by uncertainties surrounding government policies. Economist Nouriel Roubini commented to ABC News on Nov. 14 that while measures such as corporate tax cuts and deregulation could boost growth, other policies like trade tariffs and immigration restrictions might lead to higher interest rates, creating potential headwinds for markets.
Bitcoin traders, as always, remain alert to the evolving economic environment and its impact on the cryptocurrency’s trajectory.
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