In his speech at the Kansas City Fed’s annual conference, Federal Reserve Chair Jerome H. Powell indicated that the central bank is ready to cut interest rates at its upcoming September meeting.
Powell's Speech
Fed Chair Jerome H. Powell spoke at the Kansas City Fed's annual conference in Jackson Hole and stated that the size of the rate cut is still up for debate. The central bank is prepared to adjust its policy to defend the labor market and the steady path of the economy.
Market Reaction
Market expectations of a possible rate cut at the Fed’s September 17–18 meeting have risen, as inflation appears to be slowing, and there are signs that the labor market may be cooling. Traders have started pricing in a one-in-three chance of a larger half-point rate cut from earlier expectations of a quarter-point cut.
Bitcoin Surge Following Powell's Comments
The financial markets reacted very quickly to Powell's remarks. Shortly after his speech, Bitcoin prices were up more than 1.2% to $62,300, indicating enhanced optimism about the relief of monetary policies and their implications for asset prices.
Jerome Powell's comments sparked a wave of interest in financial markets, indicating a possible shift in monetary policy next month.
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