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The bitcoin price is now hovering around $23,000 per bitcoin, up from under $17,000 at the beginning of the year. Ethereum
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Now, after last week’s red-hot U.S. jobs report sparked fears of a return of aggressive Federal Reserve interest rate hikes, Fed chair Jerome Powell is set to give a speech tomorrow in which he may deliver a shock wake-up call to bitcoin, ethereum, crypto and stock markets.
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The bitcoin price could come under pressure after concerns over aggressive Federal Reserve action in … [+]
“Bitcoin continues to lose momentum after the stronger-than-expected January jobs report forced the market to prepare for two more rate hikes,” Yuya Hasegawa, crypto market analyst at Tokyo-based Bitbank, said in emailed comments.
Friday’s non-farm payroll report showed the U.S. added just over 500,000 jobs in January, blowing an estimate of under 200,000 out of the water. Earlier in the week, Powell announced an interest rate hike of a quarter of a percent, the eighth straight increase but the smallest increase since March, and warned “the job”—of stamping out inflation—”is not fully done.”
However, Powell’s comments were taken by the market to be more on the dovish side than expected, sending bitcoin, ethereum, crypto and stocks sharply higher.
The jobs report “was an incredible surprise and it raises a lot of questions about what the Fed is going to do next,” Kristina Hooper, chief global market strategist at Invesco, told Reuters. “What I think is causing some of the volatility is markets trying to make sense of how the Fed will perceive this.”
Tomorrow, Powell will give a speech that will be closely watched for signs he’s turned hawkish in the face of a booming jobs market. On Wednesday, president of the Federal Reserve Bank of New York, John Williams, is also due to speak.
“Given last week’s failure to fully suppress the market’s optimistic rate outlook, the Fed members will likely continue to remind the market that the Federal funds rate will climb above 5% and will be kept there throughout the year,” Hasegawa added.
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Expectations the Fed could be about to pivot to a looser monetary policy has boosted the bitcoin … [+]
Though last week’s surprisingly strong jobs data sparked fears of aggressive Federal Reserve action, some think the better-than-expected numbers could be merely “seasonal noise.”
“The blowout 517,000 increase in total employment was almost certainly a function of seasonal noise and traditional churn in early year job and wage environment and exaggerates what is already a robust trend in hiring,” Joe Brusuelas, chief economist at consulting firm RSM US, said in a client note seen by Politico.