US Federal Reserve Chairman Powell's press conference has ended.
There are additional points to those already published. The most interesting of them is that Powell was asked about cryptocurrencies and banks and he said that the Fed is not against innovation and banks can serve clients if they manage risks. This is on the topic of canceling the debanking of the crypto industry in the US.
In general, the remaining theses:
- The Fed needs to see progress on 12-month inflation.
- The last two inflation reports have looked good. But the Fed won't rush to cut rates; we're in data-gathering mode. We need consistent numbers showing progress on inflation.
- It looks like there are preconditions for further progress in inflation.
- We don't need to wait for 2% inflation to lower the rate.
- The Fed has a very thorough budget process.
- The flow of migrants across the border has decreased and there is every reason to believe that this will continue. But job creation has also decreased and together this may stabilize the unemployment rate.
- There is no data yet about a reduction in the number of immigrants, but business representatives are talking about it.
- We are significantly above the neutral rate.
- We intend to continue reducing the Fed's balance sheet (QT). Recent data have shown that reserves are still plentiful.
- The direction of trade has changed, it is no longer so concentrated in China.
- The possible range of trade duties introduced is very wide and it is not yet known what will be adopted in the end. We do not know how the increase in trade duties will affect consumers.
- Trade policy uncertainty, if large and persistent, may begin to matter; I don't see that happening today.
- Artificial intelligence is a big event for the stock market, but we are focused on macroeconomics.
- The Fed is watching the sell-off in U.S. stocks with interest. The sell-off is not a significant and sustainable change for the Fed.
- We look at asset prices, leverage and funding risk from a financial stability perspective.
- If there was a surge in layoffs, we would see a rapid increase in unemployment because hiring remains low.
- Uncertainty remains, it is always with us.
- I can say that the risks of a deterioration in the situation on the labor market have decreased.
- The Fed will discuss a potential revision to its employment targets.
- The general opinion of the Fed members: we do not need to rush to lower the interest rate (in response to a question about lowering the rate in March, - ed.).
❗️- As for cryptocurrencies, we believe that banks can serve customers if they manage risks. The Fed is not against innovation.
Powell is clearly not a fan of the idea of a rate cut at the Fed's next meeting on March 19. A rate cut in general, and the "significant rate cut" Trump is expecting in particular. We'll probably hear more about the Fed's and Trump's views on the matter before then.
But for now, the#BTCrate looks cheerful and has even moved into a stable uptrend according to our indicator on the hourly TF. Although the growth structure since January 27 still looks dangerous and with obvious accumulations of bull stops behind lows.
