Powell to Face Congress as Fed Outlook Sparks Crypto Volatility

The testimony comes at a time when there is an increase in geopolitical risks and a stubborn inflation that is affecting the expectation of future Federal response.

Crypto assets have become more volatile because traders are trying to determine whether interest rates will be cut as suggested by recent words of the Fed officials.

Before new economic data can provide any more context to the policy outlook of the Federal Reserve, markets await cues from Powell.

Federal Reserve Chair Jerome Powell is scheduled to testify before Congress in June 25 and 26 to provide his semiannual monetary policy report. These consecutive gatherings are an event that is taking place against a backdrop of increased global uncertainty, concerns of inflation that remain, and rising hopes of potential interest rate reductions.

On Tuesday, Powell will appear before the Senate Banking Committee, and on Wednesday, he will appear before the House Financial Services Committee. Financial markets will be keen to listen to his remarks to gauge indicators of any change of direction in the monetary policy of the central bank.

Attention is Shifted to Potential Policy Shifts after Waller Remarks

The view of a rate cut has been gaining momentum after the Federal Reserve Governor, Christopher Waller, commented on this issue recently. He reported that it can achieve a cut in July as long as inflation figures are improving. The markets are now looking at the tone and words of Powell to tell whether the Fed might look into softening its current position.

In its key interest rate range, the Federal Reserve has kept the range at 5.25 to 5.50% for almost a year. In the most recent forecast, the authorities estimated just a single decrease in 2024, regardless of continuing worries that the world economy has been hit by international tariff pressures and Washington's tariff policies. Players in the market are deciding whether these conditions may necessitate a reconsideration.

Crypto Sensitive to Monetary Policy Perspective

Before the testimony of Powell, Bitcoin had encountered significant price fluctuations. The cryptocurrency has dropped to less than 99,000 in the recent past following its rise to more than 108,000 in mid-June. Market sentiment is directly linked to the boons of monetary easing, which are generally viewed as a positive in the riskier markets, such as cryptocurrencies.

Other economic indicators that will be evaluated by investors later in the week are the jobless claims and the index of personal consumption expenditures (PCE) in May. These data points will be important when forming future policy implications going ahead.

The post Powell to Face Congress as Fed Outlook Sparks Crypto Volatility appears on Crypto Front News. Visit our website to read more interesting articles about cryptocurrency, blockchain technology, and digital assets.