On August 27, Bitcoin (BTC) reached the level of $11,600 following the announcement by the U.S. Federal Reserve that it intends to maintain an average inflation rate of 2%.
Coin360 and Cointelegraph Markets data show an increase of several hundred dollars in BTC/USD on Thursday, following a speech by Jerome Powell, the Fed president, about the country’s economic situation.
Powell: Inflation may be „slightly above 2%“.
The markets were waiting for signs of inflation news, with rumors circulating that the Fed would allow inflation rates of up to 4%.
In his speech, Powell confirmed that inflation could rise above the Fed’s target of 2%, but only temporarily.
„Following periods of inflation below 2 percent, the appropriate monetary policy is likely to aim for an inflation target above 2 percent,“ summarized Powell.
„In an attempt to achieve an average inflation rate of 2% over time, we are not binding ourselves to a particular mathematical formula that defines the average value.
At the time of writing, following Powell’s intervention, Bitcoin Loophole was back to about $11,350.
Shelter assets feel the pressure of the Fed’s commentary
As pointed out by Cointelegraph, many expected that the possible increase in inflation would favor the goods shelter and burdened the U.S. dollar.
With the arrival of information from the Fed, gold peaked at $1,970, gaining $30 on the side range around $1,940.
At the same time, the U.S. dollar index, which had already reached a two-year low in recent weeks, dropped further after Powell’s speech began, returning to close to the levels it was at on Wednesday.
„In conducting monetary policy, we will remain highly focused on promoting the strongest possible labor market for the benefit of all Americans,“ concluded Powell.
„And we will firmly try to achieve a rate of inflation of 2% over time“.