The president of the USA renamed Powell as president and Lael Brainard as vice president of the Fed. What does it mean for crypto?
United States President Joe Biden nominated Jerome Powell as Chairman of the Federal Reserve (FED) for the second year in a row. The White House made the ad this Monday morning, as reported by various news outlets.
Powell was appointed chairman of the Fed by the Trump administration and took office in February 2018. More recently, the Republican has led the nation’s economy amid the pandemic crisis. As part of its leadership, and the effort to respond to the COVID-19 pandemic, the US central bank implemented an unprecedented stimulus policy. notably doubling the size of the Fed balance sheet to USD $ 8.7 trillion to inject liquidity into global markets.
The “success“Of Powell’s shares”to cushion the impact of the pandemic and get the US economy back on track“They have led him to win a second candidacy. President Biden highlighted this in the statement.
While much remains to be done, we have made remarkable progress over the past 10 months to get Americans back to work and our economy moving again. That success is a testament to the economic agenda that I have pursued and the decisive action the Federal Reserve has taken under Powell’s presidency.
Powell again for FED presidency
The announcement about Powell’s nomination comes after some rumors that the Biden administration was considering Fed Governor Lael Brainard for the job. Although a more attractive option for progressives, the The White House noted that it has chosen Brainard to fill the position as vice chairman of the Federal Reserve board of governors.
With Powell as president and Brainard as vice president, Biden shared his belief that the duo will help keep the focus on low inflation, stable prices, and provide more employment for the American people, in addition to implementing actions to address “the economic risks posed by climate change and anticipating emerging risks in our financial system“.
“Like I said before, we can’t just go back to where we were before the pandemic, we need to rebuild our economy better and I’m sure President Powell and Dr. Brainard are focused on keeping inflation low and prices stable and achieving full employment. will make our economy stronger than ever“Commented the president of the USA.
Powell’s current four-year term as Fed president will end in February 2022. The Senate is expected to confirm the nominations of Powell and Brainard in the coming days.
As reported by the news media, the announcement appears to have been taken positively by investors as it coincided with a 0.7% increase for the S&P 500as well as a modest boost to stock market futures. Meanwhile, government bond yields were higher across the board.
What does it mean for cryptocurrencies?
As noted CoinDeskBoth Powell and Brainard share similar perspectives on the economic policies and regulation of cryptocurrencies, so the decision did not represent, in the opinion of economists, greater importance in relation to the possible impact on the industry and the market of the currencies. digital.
“They both share the conviction that cryptocurrencies should not be allowed to grow unfettered to the point where they can threaten the existing financial system.“, Highlighted in this regard the aforementioned media. On the other hand, he says that both seem to coincide with a tolerant stance in the face of inflation, which could be positive for Bitcoin.
The Official policy of the Fed since September 2020 has been to keep interest rates low, allowing inflation to be somewhat higher than the standard 2% target if it allows full and inclusive employment. In this regard, Powell has argued that inflation will cool down once the factors associated with the pandemic return to normal. However, this argument has raised doubts and criticism from some analysts, especially after a recent report that revealed that inflation has risen at its fastest rate in the last 30 years.
The narrative around Bitcoin As a safe haven asset for inflation, it has been strengthened amid this scenario. The top cryptocurrency quadrupled in price in 2020 and this year has reached new heights above $ 68,000. Some analysts have emphasized that this price mark above $ 60,000 is a sign that an increasing number of investors are confident in adopting Bitcoin to protect yourself from the effects of inflation.
By the time of editing, Bitcoin hovers around $ 58,000 amid a widespread downtrend in the digital currency market.
Hannah Estefanía Pérez’s version / DailyBitcoin
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