This Week, Fed Chairman Jerome Powell’s Statements Could Determine Bitcoin Direction!

• The comments from Fed Chairman Jerome Powell about the U.S. economic outlook in his speech carry a significant indicator that may move the market for traders.
• Powell had stated that the majority of central bank officials felt it would be appropriate to raise interest rates further when needed, based on data regarding inflation and unemployment.
• According to participants in the CME FedWatch Tool, the likelihood of the Fed changing the target federal funds rate at the upcoming FOMC meeting seems almost non-existent.

FED Chair Jerome Powell will hold a press conference after the interest rate decision on Wednesday: Why are these statements so important?

Why Are Powell’s Statements After the Interest Meeting So Important?

The outcome of the U.S. Federal Open Market Committee (FOMC) meeting, scheduled for October 31 and November 1, 2023, is likely to have a mild impact on stock prices and Bitcoin prices. However, the subsequent comments from Fed Chairman Jerome Powell about the U.S. economic outlook carry a significant indicator that may move the market for traders.

Traders and investors seem to be in consensus about a pause in interest rate hikes at the upcoming FOMC meeting. However, there remains a risk of an interest rate hike at the December 13, 2023 meeting, leaving room for caution despite the warnings from Federal Reserve officials.

In recent Fed meetings, officials have cautioned the market not to exaggerate the accommodative monetary policy stance. Powell had stated that the majority of central bank officials felt it would be appropriate to raise interest rates further when needed, based on data regarding inflation and unemployment.

Bitcoin Price Reaction

According to participants in the CME FedWatch Tool, the likelihood of the Fed changing the target federal funds rate at the upcoming FOMC meeting seems almost non-existent. However, the expectation of a 0.25% interest rate increase from the current range of 550-575 basis points is at 19.8%. Therefore, signs in Powell’s speech hinting at decisions to raise interest rates in the future meetings could trigger a Bitcoin price reaction, similar to the S&P 500 and Nasdaq Indexes.

Previously, COINOTAG had reported the potential for a pause in a BTC price rally based on significant on-chain developments, such as profit realization by short-term Bitcoin holders. It will be necessary to see what happens if the largest cryptocurrency cannot break through the resistance around $35,000 next week.