In this regard, Powell indicated that inflation will last longer than expected, and assured that since the EDF They will implement measures to solve the economic inconveniences that affect the local economy.
The president of the US Federal Reserve (FED)Jerome Powell today presented testimony before a panel of the Senate of the United States, in which he indicated that the inflationary phenomenon that is shaking the North American nation could extend beyond what was estimated.
Inflation will no longer be transitory
Powell’s statements confirm the reading that several analysts were already announcing for a few weeks, in which they assured that the outlook for the US economy was not very encouraging, precisely because certain indicators are not responding favorably after the measures applied by the EDF and other government entities.
In turn, Powell’s clarification by stating that inflation would no longer be a phenomenon “transient” It contrasts sharply with his words on past occasions, where he included that expression every time he referred to the subject. “It is time to remove the word ‘transitory’ regarding inflation”said the main representative of the EDF during the hearing before the Senate Banking Committee.
Possible change in measurements?
Although the measures implemented by the EDF from 2020 they aimed to support the people most affected in the framework of the pandemic by COVID-19, many analysts and economists especially criticized the pronounced printing of new dollars to finance public spending. In this regard, several polls maintained that approximately one fifth of the total US $ currently in circulation was printed in this period, which could negatively affect many other future economic indicators.
The reading given to Powell’s statements is that there will possibly be changes in the monetary policies currently in force. What does seem to be a fact is that the EDF It will gradually reduce the buyback of sovereign bonds, but it is not known whether the reduction in bank interest rates will still continue at least until 2023.
One of the indicators that has increased the most is the consumer price index, which rose about 6.2% in October, being the most pronounced increase in the last 30 years.
Despite this, Powell remains optimistic about the measures that the EDF to rescue the economy after the effects of the pandemic. Let us bear in mind that in previous speeches the head of the organization assured that he has expectations that things will be regularized once the imbalances between supply and demand diminish, this in relation to the increase in prices of certain products and services.
Bitcoin as an alternative to safeguard the inflationary problem
What Powell said today made his weight felt on the cryptocurrency market, especially on Bitcoin, Precisely because the digital currency even traded above USD $ 59,000 hours before its participation before the Senate, and afterwards it fell again below USD $ 58,000 per unit.
Despite the strong and constant volatility seen in the price of Bitcoin In recent days, analysts and enthusiasts agree that the digital currency fulfills its role as an asset safe in the face of the inflationary problems facing the US. Proof of this is the growth it has had in recent months, reaching a higher price. to $ 69,000 at its new all-time highs.
However, the digital currency is no stranger to what happens in the main markets and on the international scene, since in the framework of Black Friday it registered a fall that took its price below USD $ 54,000 for a short period of time. It is worth noting that there are also many fears regarding the appearance of a new variant of the COVID-19, known as Omnicron, which the who qualifies as much more contagious than previously seen strains.
Source: CoinDesk, file
Version by Angel Di Matteo / DailyBitcoin
Picture of Nicole Design for DiarioBitcoin