Federal Reserve turns dovish, US stocks rally across the board, Bitcoin surges to $38,000

The three major U.S. indices all closed higher yesterday, with Bitcoin briefly reaching $38,377. Federal Reserve Board Governor Christopher Waller, known for his hawkish views, stated yesterday that he is confident in keeping inflation around 2% without a significant increase in unemployment. He also mentioned that if inflation continues to decline over the next few months, the Fed may consider cutting interest rates, which fueled market optimism yesterday.

Fed's Waller Dovish on Monetary Policy

According to Reuters, Federal Reserve Board Governor Christopher Waller delivered a speech at the American Enterprise Institute in Washington, D.C., expressing cautious optimism about the U.S. economy and inflation. He stated that "inflation is tracking very much like I thought it would," and added:

"I am increasingly confident that current policies will slow the economy enough to bring inflation back to 2%. And 'quite confident' we can achieve that without a sharp rise in the unemployment rate."

Waller indicated that if inflation continues to fall over the next few months, the Fed could start cutting rates. This is not about trying to save the economy, it fits every policy rule, and we have no reason to keep rates high forever.

However, Waller also emphasized that if subsequent data show unexpected price pressures rebounding, the Fed could still raise rates further. He said unforeseen shocks could "blow up" the soft landing scenario.

Bitcoin Surges Above 38K Again

In addition, S&P Global Ratings raised its forecast for U.S. economic growth next year from 1.3% estimated in September to 1.5% growth.

Bitcoin surged above 38K yesterday, hitting $37,822 before the deadline.