Good news for cryptocurrencies : The Fed announces a favorable trajectory for inflation

Every statement by the Federal Reserve Chairman, Jerome Powell, is closely followed by financial markets. Indeed, during his last speech on September 30, 2024, Powell expressed measured optimism about the Fed’s ability to bring inflation back to its 2 % target. This outlook could well be the catalyst for a new major rise in the crypto market.

Jerome Powell and the return of inflation to 2 %

During the 66th Annual Meeting of the NABE (National Association for Business Economics), Jerome Powell reaffirmed his confidence in the Fed’s ability to bring inflation back to its 2 % target. “We are confident that inflation is on a sustainable trajectory to reach our target,” he declared. He also pointed out that although the labor market remains strong, its gradual cooling over the past two years does not require further immediate interventions. Powell thus tempered expectations for new rate cuts, stating that any decision would depend on upcoming economic data.

These statements are particularly important in the context of an American economy showing signs of resilience, despite inflation concerns. He emphasized that the path to controlled inflation remained difficult to predict with certainty and reiterated the Fed’s commitment to adjusting its monetary policy based on data developments. A further rate cut by the end of the year is not ruled out, but it will mainly depend on the upcoming inflation reports.

The crypto market and the prospect of an imminent rally

Although Powell did not promise new rate cuts for 2024, the crypto market remains optimistic. Global monetary easing policies, especially in China, could benefit cryptos. If economic data remains favorable, a rebound could be expected, particularly with its bullish history in the fourth quarter.

Historically, the months from October to December are often marked by significant gains in the crypto market, and this year could well follow this trend, especially with Powell’s cautious statements on monetary policy.

Jerome Powell’s optimism regarding inflation reduction, combined with a global environment favorable to monetary easing, seems to offer a conducive context for a crypto rally. As investors eagerly await the next economic indicators, major cryptos could well ride this wave and reach new heights before the end of the year. However, as always, caution is advised due to the volatility of cryptos.