According to U.Today, Federal Reserve Chairman Jerome Powell has emphasized the need for further discussion and data before making any decisions on interest rate cuts, a move that financial markets expect to happen in June. Powell, speaking at an event in Stanford, California, noted that recent data on job gains and inflation have exceeded expectations. He stated that interest rate reductions would only occur when there is 'greater confidence that inflation is sustainably moving down' towards the Federal Reserve's 2% target.
In his most recent policy meeting in March, Powell had indicated that the baseline outlook was for rates to fall 'later this year,' and that recent data did not 'materially change the overall picture, which continues to be one of solid growth.' However, he did not provide any indication of when the Federal Reserve might ease its credit control. Upcoming jobs data, particularly the March nonfarm payrolls report due for release on Friday, and incoming inflation readings next week, will be crucial in shaping the forecast for the central bank's policy meetings on April 30-May 1 and June 11–12.
Inflation, as per the Federal Reserve's preferred measure, remains half a percentage point or more above the central bank's 2% goal, and recent progress has been limited. These views on the Federal Reserve's actions are impacting the cryptocurrency market, which has experienced a sell-off since the beginning of the week. Bitcoin, for instance, dropped significantly, hitting a low of $64,589 on April 2. Persistent U.S. pricing pressures have led investors to cut back on bets on Federal Reserve interest-rate reduction, thereby strengthening the dollar. This creates a challenging environment for speculative sectors of global markets, such as the cryptocurrency industry. Bitcoin has dropped nearly 8.26% since reaching a high of $73,798 in mid-March. Recent data revealed that U.S. manufacturing unexpectedly expanded for the first time since September 2022, and input costs increased.