Jerome Powell, the Chair of the US Federal Reserve, is optimistic about the possibility of reducing inflation to the target rate of 2%. Speaking at the 66th NABE annual meeting, he expressed confidence that inflation is on a sustainable downward path. This is promising news for Bitcoin, as it may lead to more rate cuts that could boost its price.
A Strong Labor Market
Despite concerns about the unemployment rate, Powell described the labor market as "solid." He noted that it has stabilized since its volatility two years ago. Importantly, he mentioned that they do not see a need for further cooling in the labor market to achieve their inflation goals. This suggests that the economy remains resilient.
Rate Cuts on the Horizon?
While Powell confirmed that the Fed is not rushing into further rate cuts this year, he did acknowledge that future cuts will depend on upcoming inflation data.
He hinted that there might be two more 25 basis point rate cuts if conditions are favorable. His comments suggest a cautious yet optimistic approach, as the Fed will evaluate the economy on a meeting-by-meeting basis.
Bitcoin's Bullish Outlook
Despite the uncertainty around rate cuts, Bitcoin continues to show positive momentum. Trading firm QCP Capital indicated that global monetary easing, particularly from countries like China, could benefit Bitcoin as a risk-on asset. Historically, Bitcoin performs well in the fourth quarter, often yielding its highest returns during this period.
Positive Trends for Bitcoin
As September draws to a close, Bitcoin is set for a positive monthly close. Historically, when Bitcoin has closed positively in September, it has continued to rise in October, November, and December. This trend bodes well for the cryptocurrency's future, especially since it has only recorded negative returns in October twice.
Breaking New Ground
Experts suggest that for Bitcoin to reach new highs, it needs to break above the $70,000 mark. Markus Thielen, founder of 10x Research, has predicted that Bitcoin could reclaim this level within the next two weeks and even reach a new all-time high by late October.
Want to know where Bitcoin is headed? Even with some uncertainties in the economy, the long-term outlook for Bitcoin looks positive. With Powell's confidence in controlling inflation and possible rate cuts coming, things are looking good for both the economy and Bitcoin.
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