Bitcoin falls after Fed’s Powell takes hawkish tone at Jackson Hole

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By BitcoinWiki News

Key Takeaways:

  • Bitcoin’s price fell below $26,000
  • Federal Reserve chair Jerome Powell took a hawkish tone during a speech in Jackson Hole, Wyoming
  • Powell stated that the inflation target is 2% and will remain the same
  • The central bank might raise rates further
  • Bitcoin dropped to $25,942 after the speech
  • The digital asset descended along with major stock indices
  • Recent market gains came to a halt
  • The dollar index increased to its highest level since March
  • A strengthening U.S. dollar index creates headwinds for risk assets like Bitcoin
  • Powell’s speech reminded attendees of comments made at the same event last year that stopped a market rally
  • Policy rate has been raised 300 basis points since last year’s Jackson Hole Symposium
  • The current Federal Funds Rate is 5.25-5.50%

Bitcoin’s price fell below $26,000 after the Federal Reserve chair, Jerome Powell, spoke in a hawkish tone during a speech at the Jackson Hole Symposium. Powell confirmed that the Fed would maintain its 2% inflation target and suggested that the central bank might raise rates further. This announcement caused Bitcoin to drop to $25,942, down 1% in the past 24 hours. The digital asset, along with major stock indices, reacted negatively to the speech, as it hinted at the possibility of further tightening from the central bank. The recent market rally was halted, and the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite remained mostly flat on Friday. The dollar index also increased to its highest level since March, which can create headwinds for risk assets like Bitcoin. Powell’s speech reminded attendees of his comments at the same event last year that stopped a market rally and led to 12 months of monetary tightening. He reiterated the Fed’s commitment to bring inflation down to the 2% goal and highlighted the significant policy tightening that has already taken place. Since last year’s Jackson Hole Symposium, the Fed has raised the policy rate by 300 basis points, including 100 basis points in the past seven months, with the current Federal Funds Rate at 5.25-5.50%.

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