After the Interest Rate Decision, Fed Chairman Powell Speaks Live: Here are the Most Important Points and Bitcoin’s Reaction

In its statement at 21:00, the FED had increased interest rates by 25 basis points.

Interest rate increase in line with expectations, bitcoin It did not cause much volatility in its price.

Now is cryptocurrency investors focused on the speech that Fed Chairman Jerome Powell will give, and it is trying to catch some clues from this speech.

Here are the highlights of Jerome Powell’s statements on live broadcast:

• Isolated banking issues could threaten the banking system if not addressed, so we took decisive action.
• We remain committed to reducing inflation to 2%.
• Our banks are strong. We follow the problems in banks closely. We use all the tools at our disposal to keep banks safe.
• Inflation is very high and the labor market is still very tight.
• Inflation continues to exceed our expectations. Although inflation has regressed slightly, we see that inflation pressures still continue.
• Powell said there is a long way to go for inflation to return to 2% and it will have ups and downs.
• Although inflation is somewhat moderate, recent strong data point out that inflation pressures continue to be high.
• We will closely monitor incoming data and the actual and expected effects of tighter credit conditions. We will use these as the basis for our decisions.
• We no longer indicate (due to banking loan terms) that continued interest rate increases may be appropriate.
• Events in the banking sector will cause us to see some tightening in the credit sector. However, it is too early to tell what this will look like and what policy we will follow against it.
• It is too soon to tell how rates should respond to the bank crisis.
• We will continue to decide from meeting to meeting based on the data.
• A period of below-trend growth will likely be required to reduce inflation.

Powell used the following statements in the question and answer session:

• At this meeting, we thought of skipping the interest rate hike.
• In principle, we can think of banking tension as equivalent to an interest rate hike.
• In assessing the need for further rate hikes, particular attention will be paid to the actual and anticipated effects of credit tightening.
• It is possible that the banking crisis had only moderate effects.
• If there is a tightening in banks and loans, we can reach our policy target sooner. For this reason, some consider that rate hikes may not continue.
• Interest rate cuts are not among our main expectations this year.

Bitcoin price gave the following reactions during Powell’s statements:

A 62 percent chance of a 25 basis point increase is given for the FED’s next meeting

FED funds futures traders see the prospect of a 25bps increase in May as 62%.

Much has changed since the Fed’s last meeting on February 1 and its decision to raise 25 basis points. Between Powell’s hawkish sessions in Congress and his dove-toned implications for the global financial system crisis, market expectations for the Fed’s actions today fluctuated wildly. However, interestingly, expectations had returned to 25 basis points, as after the February meeting.

When the market was at its hawkish, it had priced in a 75% probability of a 50 basis point increase.

At its most hawkish, the market had priced in the 75% probability of a 50 basis point increase (after Powell’s hearings). Later that ratio dropped to a 63% ‘stall’ of the FED following the collapse of the SVB and Credit Suisse. Then, last week, expectations were pushed up to 80% for a 25 basis point increase.

*Not investment advice.