The Fed unyielding on rates, Bitcoin under pressure!

At the San Francisco conference, Jerome Powell confirmed that interest rates would remain unchanged as long as the inflationary situation does not improve. This announcement is weighing on the crypto market, with Bitcoin dropping by 1.35% in an hour.

The Fed stands firm on rates

The verdict is in: the Fed will maintain its rates at the current level until inflation shows tangible signs of slowing down. Jerome Powell was firm, hammering home that this restrictive policy will remain in place “for longer” if the situation demands it. An unambiguous message that reflects the central bank’s top priority: to curb the rise in prices.

This resolve of the Fed to hold steadfast is putting enduring pressure on the cryptocurrency market. Deprived of a prospect of monetary easing, Bitcoin sees its outlook darkening. Investors understand that the tightening of financing conditions will weigh heavily on risky assets for a long time, limiting the potential rebound of the king of cryptos.

With an inflexible Fed, the evolution of Bitcoin will now more than ever play out on the inflation front. The upcoming releases of the PCE price index will be crucial.