Federal Reserve Chairman Jerome Powell reiterated this Wednesday that smaller interest rate rises are inevitable, however, Powell revealed that the SEC is planning on significantly slowing interest raises from December onward.
Despite announcing that country’s battle against inflation is “far from over”, the chairman confirmed that the Commission will begin the next step, by slowing down the raises.
“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said. “The time for moderating the pace of rate increases may come as soon as the December meeting.”
Putting the breaks on the most optimistic viewpoint, Powell also revealed that the SEC does not have a stipulation on how far it is willing to go in order to really tame inflation in America. While not revealing that number, the chairman indicates that rates will go higher than the current 4.6%.
The Fed chairman also emphasized the importance of raising interest rates to levels that would bring inflation to 2%, “We have a long way to go in restoring price stability,” he said during his speech.
This implies that the Federal Reserve will most likely hike interest rates by 50 basis points, or 0.5 percentage points. These numbers will severely contrast with the previous four consecutive 75 basis points (0.75 percentage points).
Crypto Responds Favorable to Powell’s Speech
The cryptocurrency space celebrated a much-deserved breathing room, following the news of the more favorable interest rates scenario.
Bitcoin rose by 4%, reaching $17,200 on November 30. Meanwhile, Ethereum also jumped in value, going from $1,265 to 1,301 only a couple of hours after the speech.
Meanwhile, in reaction to the Federal Reserve chair’s remarks, the NASDAQ Composite Index climbed 2.40% during the day.
This modest but important hike marks the strongest upward trend ever since the FTX meltdown crashed the market.
Many are now wondering if crypto could return to the levels it traded before the collapse of the cryptocurrency exchange.