Bitcoin Holds Steady Above $57K During Fed Chair Powell’s Congressional Testimony

U.S. Federal Reserve Chairman Jerome Powell recently acknowledged the impact of a softer labor market while emphasizing that high inflation remains a significant concern. The possibility of a rate cut in September slightly increased following Powell’s remarks.

Powell highlighted the risks associated with reducing policy restraint too late or inadequately, as it could potentially weaken economic activity and employment. During his testimony before a Senate committee, Powell expressed awareness of the current downward trends in the labor market, indicating the Federal Reserve’s vigilance towards potential risks.

In response to Powell’s statements, the price of Bitcoin (BTC) experienced a brief uptick but swiftly retreated, settling just above $57,000 at the time of reporting, showing a modest increase over the past 24 hours. Meanwhile, traditional markets exhibited stability, with major U.S. stock indexes maintaining a flat trajectory, while the dollar and bond yields saw slight gains.

Despite Powell’s cautious tone, particularly regarding inflation, he emphasized the Fed’s stance on rate adjustments. Powell stated that a reduction in the federal funds rate target range would only be considered once there is a stronger confidence in inflation moving steadily towards the 2 percent mark.

According to CME FedWatch, the likelihood of one or more rate cuts at the Fed’s September meeting currently stands at approximately 75%, a marginal increase from the previous day and a notable rise from the figures reported a month ago. The upcoming release of the June Consumer Price Index (CPI) report is expected to provide further insights into inflation trends. Forecasts suggest a 0.1% increase in prices last month, with core prices (excluding food and energy) projected to rise by 0.2%. Annual estimates anticipate headline inflation at 3.1% and the core rate at 3.4%. Any unexpected deviations from these predictions could swiftly impact the probability of a rate cut in September.