Strict Federal Reserve Chairman Jerome Powell is putting pressure on Bitcoin

Bitcoin has had a fantastic week so far when it comes to price. The US inflation figures were lower than expected and that sent prices up a bit. Yesterday, however, it was Federal Reserve Chairman Jerome Powell’s turn to explain his Federal Reserve’s new interest rate decision.

Above 5 percent

If we are to believe Powell, US interest rates still have a small climb ahead of them. The Federal Reserve raised interest rates by 0.50 percent to 4.25 to 4.50 percent yesterday. This means that interest rates are currently at their highest point in 15 years. Although the Federal Reserve is reducing the pace of interest rate hikes with the choice of 0.50 percent, Powell wants to emphasize that historically it is still a significant increase.

“50 basis points (0.50 percent) is still a significant increase historically and we still have a while to go,” said the chairman of the US central bank. Powell expects interest rates to eventually rise above 5 percent to really tackle inflation. That inflation came in yesterday at 7.1 percent, while the Federal Reserve’s goal is to keep it at 2.0 percent.

Inflation was expected to come in at 7.3 percent, causing markets to rebound thereafter. That revival was short-lived, however, because Powell had strict texts in store for us again yesterday. All told, it looks like there are still a few tough months ahead.

Correlation with copper

Interestingly, Bitcoin’s correlation with copper has recently risen again. Within the financial markets, copper is also referred to as “Dr. Copper”, because it is a good indicator of the health of the economy. When copper does well, the economy often does well, because copper is an important metal for the industry.

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