Yesterday, the Wall Street Journal summit took place, at which Federal Reserve Chairman Jerome Powell indicated that the US central bank will stick firmly to its current monetary policy, despite indications that borrowing money is becoming more expensive for individuals and companies.

The impact of US stock prices and bitcoin also did not deliver:

The Dow Jones fell more than 1% after statements Powell, Bitcoin is down 5% in the past 24 hours.

While Treasury yields continued to rise.

“Jerome Powell” statements come with the approach of spring and the beginning of the control of the Corona virus through the increase in the spread of the vaccine, as people expect the economy to improve with the increase in the spread of the vaccine and the restrictions of the Corona virus, whether imposed by the government or self-imposed, begin to decline.

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The effect is not only in the short term, but in the long term as well.

As a result, the cost of borrowing money is rising as the demand for credit increases.

Treasuries are bonds sold by the federal government to investors, who essentially lend government money for a small return.

Usually, as returns increase, this indicates that investors are becoming more confident in the economy because they are looking for investments that pay significantly more than the current rate of 1.55%.

Yield increases also indicate that inflation may be coming.

However, the Fed has no intention of making a change, at least for the time being.

In this regard, Powell stated:

Today we are still far from our goals of maximizing employment and 2% inflation over time

The Fed won’t try to lower yields by buying more Treasuries than it already does.

He added:

The Federal Reserve will monitor interest rates.

If conditions change materially, the Fed is ready to use the tools at its disposal to advance the achievement of its goals.

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Inflation is good for bitcoin, as the Fed’s monetary expansion has been good for bitcoin, cryptocurrency traders may have been hoping for more stimulus from the Fed every now and then.

Since the end of March 2020, when the Federal Reserve began increasing its balance sheet by several trillion dollars, the price of bitcoin has risen from under $6,500 to its current price of $48,000.

More pumping was expected, but the Federal Reserve has had enough for the time being, which has reflected and affected the performance of Bitcoin.

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