Bitcoin Soars as Fed Announces ‘Policy Adjustment Time’ in Jackson Hole

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The price broke above $61,000 after Federal Reserve Chairman Jerome Powell raised confidence that U.S. inflation is on a sustainable path of 2% and suggested the central bank may cut interest rates.

“The time has come to adjust policy. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the changing outlook and the balance of risks,” Powell said Friday at the Jackson Hole symposium.

According to CoinGecko data, following the speech at the central bank governors meeting in Wyoming, the global cryptocurrency market cap now stands at $2.28 trillion, up 0.6% over the past 24 hours.

Stocks rose on Friday on Powell’s dovish tone. The Dow Jones Industrial Average rose 417 points, or 1%. The S&P 500 rose 1.2%, the Nasdaq Composite rose 1.8%, and technology stocks led early trading in New York.

Possibility of September rate cut

According to the CME FedWatch tool, there is a 67.5% chance that the federal funds rate will be cut by 25 basis points at next month’s meeting, and a 32.5% chance that it will be cut by 50 basis points.

Bitfinex derivatives chief Jag Kooner told The Block that Powell’s speech today in Jackson Hole is a key indicator of what to expect at the next Federal Open Market Committee (FOMC) meeting on September 18. “Today’s speech will likely set the tone for September, and investors will be paying close attention to how Powell interprets recent data and any hints about the size and timing of future cuts,” Kooner told The Block.

“Broader economic indicators, such as GDP and jobless claims, suggest the economy is not in as dire a shape as it was during the 2009 recession,” he added.

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