Fed Chairman Jerome Powell Speaks: Here are his Messages and Bitcoin’s Actions!

In his speech after 75 basis points, Jerome Powell said:

• We are determined to reduce inflation. We will continue the tight monetary policy for a while.
• At today’s meeting, we decided to raise 75 basis points. We will maintain this stance and continue to shrink our balance sheet.
• It would be appropriate for us to slow down the rate of interest rate increases. But we still have a ways to go.
• The final interest rate target will be higher than previously expected.
• The data show that we may move to higher levels than our final interest rate targets at the September meeting.
• The slowdown in the rate of interest rate increases may be at the next meeting or later.

Fed Chairman #powell: We are determined to reduce inflation. We will continue the tight monetary policy for a while.

— Bitcoin System (@bitcoinsystem) November 2, 2022

bitcoin After Powell’s speech and after the interest rate decision announced at 21:00 CET, he reacted as follows:

Jerome Powell Announces 75 Bp Rate Increase

The Fed increased interest rates by 0.75 percentage points to fight inflation and signaled that it will likely continue to raise it, albeit in smaller increments.

Rate hikes and rumors of the Fed’s “turnaround” have caused huge fluctuations in the stock and bond markets this year.

Prior to the announcement, US stocks were mixed, making an unbalanced start to November. Amazon shares continued their decline after exiting the trillion-dollar club yesterday.

The only important sentence added to the statement made by the US Federal Reserve at its previous meeting was:

“When determining the pace of future increases, the Board will take into account the cumulative tightening in monetary policy, the lagged effects of monetary policy on economic activity and inflation, and economic and financial developments.”

Investors seem to interpret this as a sign that the FED will take into account the sum of the rate hikes and the fact that it will take some time before the rate hikes have an impact on the economy when making its next moves.

U.S. Treasury yields fell within minutes of the Fed’s decision to raise benchmark interest rates by another 0.75 percentage points, a move that was widely anticipated by the Fed.

Yields on the policy-sensitive two-year bond fell to 4.447 percent from 4.538 percent at Tuesday’s close, according to Tradeweb. The 10-year benchmark bond yield fell to 3.988% from 4.052% on Tuesday. As bond prices rise, yields fall.

*Not investment advice.