$1 Trillion Crypto Knife Egg Now Hung on a Fed Bomb After $200 Billion Bitcoin, Ethereum, BNB, XRP, Solana, Cardano and Dogecoin Price Crash
Bitcoin
Bitcoin price plummets toward $20,000 per bitcoin, down more than 10% in the past week, with ethereum and other top ten cryptocurrencies BNB
Now, with the bitcoin and crypto market now teetering on the brink of crashing below $1 trillion, traders are gearing up for a highly anticipated speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole central bank conference in Wyoming next week.
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US Federal Reserve Chairman Jerome Powell will speak at next week’s economic symposium in Jackson … [+]
“Powell will want to err on the side of hawkishness,” Tim Magnusson, chief investment officer at hedge fund Garda Capital Partners, told Bloomberg, adding that restoring price stability is a top priority. “The flat will be in play until the Fed stops tightening.”
Powell will speak on Friday 26 August at 10 ET and is expected to talk about the economic outlook.
The Federal Reserve launched a program of rate hikes and stimulus cuts late last year in an effort to bring down skyrocketing inflation that has shot to a 40-year high. Monetary policy tightening has crashed stock markets and removed about $2 trillion from the red-hot crypto market that had surged to a peak of $3 trillion in 2021.
This week, officials offered somewhat conflicting views on the Fed’s path forward, with St. Louis Fed President Jim Bullard calling for another 75 basis point rate hike at the Fed’s September meeting and Kansas City’s Esther George striking a more dovish tone.
“I don’t really see why you want to drag out rate hikes into next year,” Bullard told the paper The Wall Street Journaladding that he believes the Fed “should continue to move quickly to a level of policy rates that will put significant downward pressure on inflation.”
George, who is hosting next week’s Jackson Hole Fed policy retreat, said Thursday that policymakers should be mindful of how past decisions affect the economy.
“We’ve done a lot, and I think we have to be very aware that our policy decisions often operate on a backlog,” George said in comments reported by Bloomberg.
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The price of Bitcoin has fallen sharply this week, triggering a broader crypto price crash that has been wiped out … [+]
Market watchers are closely watching comments from Fed policymakers who fear the U.S. central bank could trigger a recession if it goes too hard and fast in its war on inflation.
“Fears of a recession are rising, not least because the US central bank seems fixated on further increases in interest rates, which although aimed at bringing inflation under control, raise further questions about the economy’s ability to recover,” Sophie Lund-Yates. an analyst with brokerage Hargreaves Lansdown wrote in emailed comments.
This week, the Fed’s latest meeting minutes showed officials saw “little evidence” that inflationary pressures were easing. However, members of the Federal Open Market Committee (FOMC) fear that prolonged interest rate increases could damage the economy.
“Investors are trying to figure out which way to jump amid a range of conflicting data,” Danni Hewson, analyst at investment platform AJ Bell.
“While the latest Fed minutes were delivered in a far more dovish tone than has been used recently, it also appears that central bankers are determined to keep an iron grip on inflation even as they have covered their hand with a velvet glove Comments that it could moderate the pace of rate hikes “at some point” have left investors in a bit of a quandary, and the latest jobs numbers will have only served to exacerbate it.”
