Bitcoin (BTC) fell below $26,000 for part of the day on Friday, after US Federal Reserve Chairman Jerome Powell acknowledged the possibility that the Fed may need to raise rates again.
Powell spoke Friday morning at a Fed-sponsored economic policy symposium in Jackson Hole, Wyoming.
He stated that it is the “job of the Fed” to bring inflation back to the central bank’s target of 2%.
“In the past year we have tightened up the policy considerably. Although inflation has fallen from its peak – a welcome development – it remains too high. We are ready to raise interest rates further if necessary and intend to keep policy at a restrictive level until we are confident that inflation will sustainably move towards our target.”
Powell notes that personal consumption expenditure (PCE) inflation peaked at 7% in June 2022 and declined gradually to 3.3% from July, which the Fed Chairman says is “roughly in line with global trends.” .”
Still, Powell says the significant drop in PCE inflation doesn’t necessarily tell the whole story.
“Headline inflation is what households and businesses experience most directly, so this drop is very good news. But food and energy prices are influenced by global factors that remain volatile and can give a misleading signal about where inflation is heading. In my remaining comments I will focus on core PCE inflation, omitting the food and energy components.
On a 12-month basis, core PCE inflation peaked at 5.4% in February 2022 and gradually declined to 4.3% in July. The lower monthly core inflation numbers in June and July were welcome, but two months of good data are just the beginning of what is needed to build confidence that inflation is moving towards our goal sustainably.”
BTC has since jumped back above USD 26,000 and is trading at USD 26,078 at the time of writing. The highest-ranked crypto asset by market cap is down 0.39% in the past 24 hours.
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