Fed Chairman Jerome Powell has left market analysts debating the meaning of his words after announcing the Federal Reserve will skip a round of rising interest rates. This marks the first time in over a year that the central bank has decided to stay the course by keeping rates at about 5%. Powell clarified that he shouldn’t call it a skip, leaving open the door to further hawkish rate increases.
Despite the Fed’s decision to pull back on the most aggressive monetary policy strategy in the U.S. since the 1980s, stocks and crypto crumbled after the press conference. Powell said signs show inflation appears to be easing, and the Fed intends to move more slowly after a breakneck pace.
However, it’s widely believed that the Fed’s financial engineering contributed to the collapse of three U.S. banks earlier this year, and a WalletHub survey found two-in-five people say Fed rate hikes are forcing them into more debt, and putting their jobs at risk. Borrowing costs are the highest in years and mortgage rates have been volatile, and people report paying more than ever for necessities.
Powell is candid about the difficulties ahead of trying to push inflation down to the Fed’s standard 2% target. The process of getting inflation down is going to be a gradual one, he said. Though he thinks the right conditions for that are coming into place.
In places like Turkey and Argentina, bitcoin adoption continues to outpace those countries’ inflation. In other words, it’s a hard money depending on what currency you’re using.