Crypto Market Unfazed by Fed Chair’s Warning of Rate Hikes

In the past 24 hours, the broader crypto market has gained an additional 3%, bringing its market capitalization above $1.4 trillion.

The prevailing market strength persists, notwithstanding the assessment by Fed Chairman Jerome Powell that additional interest rate hikes are not out of the question should inflation fail to fall below the desired target of 2%.

Fed Chair Issues Caution

Jerome Powell, chairman of the Federal Reserve, displayed a positive outlook on the declining inflation rate but acknowledged a degree of ambiguity concerning the efficacy of recent policy initiatives.

In his address at an International Monetary Fund event in Washington, D.C., less than one week after the central bank decided to maintain benchmark interest rates, Powell acknowledged the persistent challenge of inflation. He expressed:

“The Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance”.

Powell recognized that inflation is presently surpassing the target levels established by the Federal Reserve and described the existing policy as “significantly restrictive.”

Although inflation continues to be higher than the target set by the central bank for an extended period, it has declined since its peak in the initial half of 2022.

Eleven consecutive rate increases constituted the Federal Reserve’s assertive tightening strategy, the most aggressive policy adjustment since the early 1980s.

This brought the benchmark rate from almost zero to the targeted range of 5.25% to 5.5%.

The Fed’s current position disproves analysts’ forecasts that a rate hike could occur as early as March 2024.

Altcoin Market Upswing

Following Bitcoin’s earlier Wednesday surge to $37,000, altcoins have also participated in the mega rally and are maintaining their strength.

The price of Ethereum has increased by 10% in response to BlackRock’s announcement of a spot Ethereum ETF.

Given the recent price surge, ETH aims to reach $2,500 as its next target.

Diverse altcoins and Ethereum have experienced significant growth during the recent market upswing.

In the past three weeks, Chainlink, a provider of Oracle services, has witnessed a significant surge in its value of 100%.

Meanwhile, Polygon, Ethereum’s layer-2 platform, is experiencing a substantial surge in value as its native token MATIC strives to surpass $1.

In tandem with ETH, the price of Solana has increased by 7%, approaching $50.