Following Federal Reserve Chair Jerome Powell’s eagerly anticipated keynote speech at the Fed’s Jackson Hole, Wyoming, economic conference on Friday morning, the price of Bitcoin (BTC) fell by about 5% in the two hours that followed. The S&P 500 index fell more than 2% as equity markets fell with cryptocurrency prices.
According to Bob Iaccino, Chief Strategist at Path Trading Partners and co-portfolio manager at Stock Think Tank, “the stock market had not priced this in except the last couple of days and it’s because the risk was that they would be hawkish, not the belief.”
He continued, “the market is pricing it in now at least as much as it believes the Fed, but it’s about Powell’s legacy and his credibility at this point.”
“Reducing inflation is likely to require a sustained period of below-trend growth … While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Powell said in his speech.
At first, Bitcoin, the largest cryptocurrency by market capitalization, didn’t react much to Powell’s speech, but since then, it has gone down a lot, from just under $22,000 before the speech to its current price of $20,700.
The Nasdaq is down 2.7%, the Dow Jones Industrial Average is down 1.8%, and the S&P 500 is down 2.15%.
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