On Friday, Federal Reserve Chairman Jerome Powell took the stage at the Jackson Hole symposium and made some key statements that look to be positive for Bitcoin. His message, which for many did not come as a surprise, was clear: “We do not seek or welcome further cooling in labor market conditions,” and “The time has come for policy to adjust,” he said Bitcoin responded immediately and quickly gained 3.5% to reach an intraday high of $64,879, and is currently trading at $63,896 according to CoinMarketCap data.
What Does This Mean for Bitcoin?
If you had any doubts about where the Federal Reserve is heading with interest rates, Powell’s remarks have made things clearer. The Fed is concerned about the U.S. labor market, and they see a need for interest rate cuts to support it.
Now, how many rate cuts can we expect? That’s still up in the air. It will largely depend on the economic data that rolls in over the next few weeks. For instance, a key labor market report is due on September 6, which could give us more insight.
Powell also emphasized, “We will do everything we can to support a strong labor market as we make further progress toward price stability.” This suggests that the Fed is ready to take action to keep the economy stable, which could be a positive signal for Bitcoin.
A New Market Phase?
We’re potentially heading into a new phase of the market. If the U.S. economy stays strong, we could see a favorable environment for Bitcoin. However, if the labor market weakens too much and we tip into a recession, that could spell the end of the current bullish trend.
This makes it all the more important for us to keep an eye on the macroeconomic data in the coming weeks. The Fed’s decisions will be heavily influenced by this data, and in turn, it will influence Bitcoin’s path.