The re-nominated Federal Reserve chairperson Jerome Powell has become a topic of discussion in the cryptocurrency community. Powell recently shared that the government should consider speeding up the taper in bond purchases to control inflation. This year, the Bitcoin and cryptocurrency market soared due to excessive money printing.
According to economists, investors tried to seek refuge in digital assets from the rapidly devaluating money value. On the other hand, the US government kept authorizing printing new money to inject into the economy and absorb the shock created by the COVID pandemic. However, Powell’s new remarks have now plunged Bitcoin prices and upset digital investors.
Jerome Powell Admits Inflation is Rising
Crypto proponent and Senator Pat Toomey recently questioned Powell on the matter of rising inflation concern in the country. The US government has maintained that the newly printed money will create a temporary inflation period before jump-starting the economy. However, the Department of Labor published a report last week that declares that the inflation rates are higher in the last 30 years.
Powell admitted replying to Toomey that the inflation does not seem to be transitory anymore. He further explained that the Federal expectations for 2% inflation have been running over for years. Toomey told the media that Jerome and US Treasury Secretary Janet Yellen should retire or provide better clarity for the situation.
The arrival of a new COVID variant called Omicron has hit the financial markets with a negative force. While the cryptocurrency market started showing signs of recovery from the news, Federal Reserve chair Powell suggested addressing the Senate that bond purchases should taper immediately.
As per, Bitcoin pseudonymous analyst Plan B the statement made Bitcoin crash from $59K to $57K immediately. Market experts are speculating that the recent remarks by Powell are hawkish or in support of the increasing interest rates. Meanwhile, crypto proponent and billionaire Mike Novogratz from Galaxy Investment Partners claims that the reappointment of Powell as FR chair is a bearish signal for crypto traders.