FED Chairman Jerome Powell today took centre stage in a hearing before the US Congress to reappoint his leadership at the Federal Reserve. As he spoke, the Wall Street session became quite volatile.
What Powell said
During his hearing before the US Senate Banking Committee, Powell spoke mainly about the economy and inflation.
Track live crypto price of 10000+ coins!
First, he said that the Federal Reserve will use all the tools at its disposal to support the economy and the labour market and to fight inflation.
On the subject of inflation, he added that if necessary, the Fed will also raise interest rates several times, even more aggressively.
For Powell, the time for an accommodative policy is over; it is time to return to a “normal” economic policy. The road will be long and according to the Fed chairman it will not harm the labour market.
He added that the Fed would begin reducing its balance sheet in January and that tapering would end in March.
A final note was dedicated to the Omicron variant which, according to the head of the US Central Bank, will not cause a new recession, but only a pause in growth and will in any case be short-lived.
How Wall Street reacted to Powell’s words
The Fed chairman began his hearing at 10:00 AM ET (4:00 PM CET), an hour after US stock markets opened. While the session had opened quietly, volatility began as the hearing got underway.
At the time of writing, the Dow Jones lost 126 points (-0.35%), the S&P 500 dropped 6 points (-0.13%) and the Nasdaq Composite bucked the trend, gaining 35 points (+0.24%). Energy stocks, up 1.37%, and tech stocks gained 0.33%.
European stock markets also trimmed their gains after the start of trading overseas. London was up 0.33%, Paris gained 0.71%, Frankfurt 0.88% and Milan 0.56%.
The cryptocurrency market
At the moment Bitcoin does not seem to be affected by the words of the Fed chairman. BTC is gaining about 2% today and has returned to $42,400, after plunging below $40,000 yesterday. Ethereum is also gaining 3.5% and is back near $3,200. Binance Coin (BNB) and Polkadot are flying, up 7% and Polygon (MATIC) even more, with a 12% gain.