Bitcoin drops back to $36,000 after Fed chief threatens to raise interest rates

Bitcoin drops back to $36,000 after Fed chief threatens to raise interest rates

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Answer Bitcoin drops back to $36,000 after Fed chief threatens to raise interest rates

Bitcoin price was turbulent during the highly anticipated post-FOMC press conference on Wednesday evening.

Bitcoin plunged $1,000 as Federal Reserve Chairman Jerome Powell reworked plans to raise the federal funds rate next March.

In his pre-conference speech, Powell told that, under current circumstances, many of the workforce are unable to report on their activities.

It is expected that the effects of the “Omicron” virus wave will be short, in addition to its negative economic effects.

The chairman noted that inflation was well above the Fed’s 2% target rate, and blamed supply and demand imbalances.

Earlier this month, the December CPI hit a record 7%, sending the price of Bitcoin higher.

Read:Now you can use Bitcoin at one of the largest travel and tourism agencies in the world

Citing a tight labor market, Powell concluded that the economy no longer needed to sustainably support monetary policy.

As such, plans to raise interest rates and lower the Fed’s balance sheet in March remain in effect.

Powell also stated:

The Fed will move away from highly accommodative policy to a much less accommodative policy that may be inappropriate at its inception.

Earlier yesterday, BitMEX co-founder Arthur Hayes predicted that the Fed is a disingenuous one, and can’t actually raise rates without hurting the market.

Powell, however, disagreed, saying there was plenty of time to raise interest rates.

Cryptocurrency and stock markets both fell after Powell’s speech.

Bitcoin price has dropped from over $38,200 at 2:40pm ET to under $37,000 at the time of writing.

Read:Obstacles to Bitcoin that make it difficult for him to reach the $40 thousand level… Get to know them

Meanwhile, the Nasdaq and Standard & Poor’s 500 indexes fell 0.5% over the same period.

Read also:

Founder of FTX Trading Platform: Solana is Better Than Other Blockchains Despite Outages

IMF calls on El Salvador to remove legal description of Bitcoin

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