Bitcoin surge past the $24k range for the first time in 2023 following FED chairman Jerome Powell remarks that 50% of inflation is in “disinflationary”.
At the time of publication, Bitcoin is trading hands at $23.7k, up by 3% in the daily index.
Unlike deflation, disinflation is the reduction in the rate of increase of overall price levels.
After announcing a 25 basis point increase in interest rates on February 1, Powell stated, “We can now say, I think for the first time, that the disinflationary process has started […] we see it really in goods prices,”
The FED Chair’s speech and the raise hike were favourably received by the crypto market as a whole, increasing the market valuation by more than $40 billion in the hours that followed the announcement.
As per figures from Coinmarketcap, the global crypto market cap led by Bitcoin is now at $1.09 trillion, a surge of over 4% over the past day.
Recalling Powell’s remarks during the media briefing, he stated that they should be ready for “ongoing rate rises” and that they still anticipate that the inflation rate in the services sector will grow for some time.
“We see ourselves as having more persistent inflation in that [services] sector, which will take longer to get down, and we have to complete the job. That’s what we’re here for.”
Adding to that, the Federal Reserve informed that “ongoing rate rises” will still be acceptable amidst the target of getting inflation back to its goal of 2%.
That being said, the Federal Reserve’s policy meeting, where the top bank was scheduled to announce its eighth consecutive rate hike, was one of the most eagerly awaited events.
Bitcoin and Ethereum even registered a minor dips in anticipation of FED interest rate hikes.
Bitcoin’s Worst Days Are Over- Expert
As reported by TronWeekly, Fed officials were expected to approve a 0.25 percentage point hike as inflation began to decline, a more moderate pace than the previous super-sized movements in 2022.
Its needs to be told that the benchmark interest rate of the United States central bank has increased by 4.25 percentage points in less than a year .
In the latest announcement, Powell noted that he expects inflation to decline soon, even if not implying that its reached the end of its cycle of rate hikes.
A similar sentiment was echoed by Yiming Ma, an assistant professor of finance at Columbia University Business School who claimed “the worst is over,” and “the pace of rate hikes is going to slow.”