Bitcoin price reacts well to statements by US central bank chairman

Jerome Powell, the chairman of the US central bank, sat behind his podium yesterday to inform the market about the policy of his central bank. Bitcoin responded mainly positively to that, because the price is 2.4% higher today at 59,000 dollars and seems to be slowly recovering.

Important dates coming up

There are important inflation data coming up this week in the United States, and it is precisely these data that could have a major impact on the Federal Reserve’s interest rate policy in 2024.

However, Jerome Powell indicated that they need “more good data” to know for sure that inflation is on its way to the desired 2.0%. For that reason, it is extra important that inflation shows another sign of weakness on Thursday and possibly falls even further.

According to the Fed chairman, central bank policymakers remain wary of the risks posed by a revival of inflation and do not want to start cutting rates too early.

On the other hand, they don’t want to start too late, because then the economy could get into trouble. “We are balancing those two risks right now. That’s the essence of our thinking these days,” said Jerome Powell.

Interest rate cut in September?

For now, the market appears to be betting on a September rate cut from the US central bank.

The chance of this happening currently stands at 73.3% according to the market, while a rate cut on July 31 has only a 4.7% chance according to the market.

So on Thursday we will get a new CPI and the expectation is that it will come in at 3.1%, while last month we still had a CPI of 3.3%. In that respect, the CPI is on its way down, provided of course that the data appears on the boards in this way.

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