Cryptocurrencies React to Federal Reserve Chair's Speech

According to U.Today, cryptocurrencies such as Shiba Inu (SHIB), Cardano (ADA), and XRP experienced a surge during a speech by Federal Reserve Chair Jerome Powell, although they later relinquished some of their gains. Powell addressed market fears about 'stagflation', a situation characterized by slow economic growth and high inflation, stating he did not foresee either 'the stag or the flation'. This came after JPMorgan CEO Jamie Dimon had raised concerns about potential stagflation, suggesting the US economy could be reverting to conditions similar to the 1970s. In reaction to Powell's remarks, American businessman and investor Jeffrey Gundlach predicted only one rate cut for this year, ruling out a cut in June. Powell himself admitted that predicting rate changes would be challenging, but he did not anticipate the next policy move to be a cut. He suggested that rate cuts could occur sooner if there was an unexpected downturn in the labor market, but such a decision would depend on incoming inflation data. Powell emphasized that the Federal Reserve is currently content with inflation remaining at 3%, with the aim to reduce it to 2% before considering rate cuts. Interest rate futures are currently predicting a single rate cut in 2024, with the first expected in September. The cryptocurrency market has been significantly impacted by the Federal Reserve's policy shift, with Bitcoin recording its worst monthly performance since August 2023. This is a stark contrast to previous predictions that the Federal Reserve would implement at least three rate cuts this year.