The price of Bitcoin (BTC) broke the $24,000 ceiling and the total crypto market cap jumped almost 4% after United States Federal Reserve Chairman Jerome Powell indicated that inflation has started to slow in the world’s largest economy.
“Now we can say, I think for the first time, that the process of disinflation has begun […] we see really in the prices of goods,” said Powell during the February 1 Federal Open Market Committee press briefing after announcing a 25 basis point increase in interest rates.
The rate hike and Powell’s comments appeared to go down well in the crypto market, which had been trading sideways on the speech but saw its market cap jump by more than $40 billion in the hours following the announcement.
The global crypto market capitalization is now at $1.09 trillion, up 3.88% in the last day, according to the latest figures from Coinmarketcap.
Meanwhile, BTC tipped slightly over $24,000 for the first time in 2023, reaching $24,161.27 according to Coinmarketcap.
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That being said, Powell said he still expects inflation to continue rising in the services sector for some time and is prepared for “persistent rate hikes.”
“We see ourselves as having more sustained inflation [services] sector, which will take back down, and we have to finish the job. That’s our purpose here.”
Powell noted that “sustained rate hikes” are still appropriate as the Federal Reserve tries to bring inflation back to its 2% target level.
The Fed Reserve rose 0.25%. 8th hike. The Fed did not show at the end of the hiking cycle. However, the Fed chairman said in his speech that he sees inflation coming down. 50% of inflation is in the “disinflation” phase. The market responded positively. #FOMC #Feed #asx $spx $nq $xjo pic.twitter.com/1misOrnD2b
— Jessica Amir (@JessicaDAmir) February 1, 2023
It should be noted that disinflation refers to a decrease in the rate of increase in the general price level, rather than deflation, where the general price level of goods and services falls.