The Fed chairman mentioned Bitcoin, stocks and commodities right after policy changes


On November 30, global financial markets were hit. Earlier, the Chairman of the US Federal Reserve, Jerome Powell (Jerome Powell) made comments suggesting that inflation and Omicron COVID-19 variants are facing increasing threats and that the bank’s The loose monetary policy may end sooner than expected.

Before Powell commented, Bitcoin (Bitcoin) Has been rising. The digital asset rose 6% from the low of $55,840 during the morning trading session on November 30 to an intraday high of $59,200, but the price fell below $57,000 after the Federal Reserve gave a speech.

BTC/USDT 4-hour chart. Source: TradingView

At the time of writing, Bitcoin has successfully recovered to $58,000, but a series of technical indicators show that traders have no confidence in the next move of BTC.

Stocks and commodities take a hit

It’s not just Bitcoin that has been hit hard by the Fed’s comments.According to economists and CryptoQuant analysts Jan Westenfeld, The US dollar index (DXY) rose, while the Dow, gold and other stock indexes fell.

DXY vs. Gold vs. BTC/USD vs. SPX.Source: Twitter

Westenfeld said,

“The U.S. dollar index rose because Powell said the Fed may accelerate its downsizing (no matter how credible). Everything else is falling. Including gold.”

related: Vladimir Putin says cryptocurrency “takes high risks”

The Fed “acts in a dualistic way”

Market analyst and former Treasury Department employee Nik Bhatia provided a deeper understanding of the Fed’s actions. He emphasized the fact that the Fed “has no ability to respond to dynamic conditions” but “acts in a dualistic manner.”

Bhatia said,

“If things go well, it can tighten policies. If the economy is in trouble, it will relax policies.”

According to Bhatia, “the inflation rate in the United States is very high,” and “the headline statistics show that the total price level has been at a high level for decades.”

At the same time, the Fed implemented “the simplest monetary policy ever possible,” which led Bhatia to warn that “as inflation rises, this situation will soon end.”

Bhatia said,

“The Fed is clearly heading for a policy error. Despite long-term growth and inflation expectations, it will tighten its policy due to the tightening of monetary policy itself (which is why it is called a policy error).”

No longer “temporary inflation”

Interestingly, Powell’s comments acknowledged that the year-long “temporary inflation” mantra is now coming to an end, and the Fed Chairman hinted that it is time to “exit” the temporary narrative.

Although it is refreshing to see the Federal Reserve more honest, cryptocurrency expert Anthony Pompliano pointed out that ordinary people have always known that inflation is by no means “temporary” in nature and is likely to continue until 2022.

The overall cryptocurrency market value is now $2.638 trillion, and Bitcoin’s dominance rate is 41.2%.

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