Powell staged a sell-off: Nasdaq fell by 3.5%, bitcoin went below $100,000At the last meeting, the Fed, as expected, cut the rate by 0.25%. This decision was taken into account by the markets in advance, but the revised forecasts for rates caused a sharp reaction in the financial markets.
Fed Chairman Jerome Powell said that in 2024, only two rate cuts are expected instead of the four previously envisaged. «We have reached the current level quickly, but we will move more slowly in the future,» Powell stressed at a press conference.
The markets reacted by falling. The Fed's tougher tone hit risky assets:
- The Dow Jones fell 2.58%, ending trading at 42,326.87 and recording its first 10-day losing streak since 1974.
- The S&P 500 declined 2.95% to 5,872.16.
- The Nasdaq Composite lost 3.56% to 19,392.69.
Cryptocurrencies have also come under pressure. Bitcoin, which had previously updated its high above $108,000, dropped to a weekly low of $98,844 in just a few hours. However, it later recovered and rose again above the psychological mark of $100,000. The current BTC quote is $101,543.
Pressure on bitcoin was exerted by Powell's statement that the Fed cannot legally own bitcoin, and any changes to this rule depend on Congress. Recall that following the results of the November elections, the Republican Party gained full control of the US Congress.
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