Bitcoin price approaches 39K, Federal Reserve Chairman Powell says: It is too early to talk about interest rate cuts

In a recent speech, Federal Reserve Chairman Powell expressed candid views on the current economic situation, emphasizing caution in considering rate cuts. Despite some optimistic trends in the market, Powell highlighted the ongoing battle with inflation and the Fed's commitment to a prudent policy.

The Fed's dovish stance led to a broad rally in the U.S. stock market, with Bitcoin surging to $38,000.

Powell: Will Stick to Principles in Fighting Inflation

In a recent speech, Powell stated that it is premature to declare victory over inflation.

The Federal Reserve's focus remains on bringing inflation back to the 2% target, with Powell indicating readiness to tighten further if necessary. While acknowledging the limitations of current policies, he emphasized the risks of doing too much or too little in inflation measures, noting that the current approach is nearing a balance.

Market Reacts Positively, Bitcoin Rises

The market reacted positively to Powell's comments, with Wall Street showing clear gains and bond yields declining. LPL Financial interpreted his remarks as leaning dovish. The Federal Reserve has implemented a series of aggressive rate hikes since March 2022, impacting economic activities. The market's interpretation of Powell's statements has deepened confidence in pausing rate hikes.

The Bitcoin market also showed optimism, briefly reaching 38,999:

Reality: Inflation Target Still Unmet

The Federal Reserve's focus remains on the post-pandemic dynamics of the economy. Recent data shows that despite trending towards the 2% target, inflation remains above the Federal Reserve's goal. Faced with the highest inflation rates since the early 1980s, the Federal Reserve has actively responded through a series of rate hikes, raising policy rates to the highest level in over two decades.