Crypto Market News: U.S. Federal Reserve Chairman Jerome Powell said the overall banking system in the country is strong and resilient. He said liquidity support was provided to banks as and when needed without compromising on the US Fed’s monetary policy. Powell added that the credit stress may be having an impact on rate hike plans:
“The tools to maintain financial stability are likely to weigh on economic conditions, hiring and inflation. So, as a result, our policy rate may not need to rise as much as it would have to achieve our goals.”
The Fed Chair was speaking at a panel discussion on the “Perspectives on Monetary Policy” before the Thomas Laubach Research Conference hosted by the Federal Reserve Board of Governors on Friday. The discussion happened amid a mixed expectation in the crypto market about whether the US Fed would pause or maintain a hawkish pause in the June 2023 FOMC meeting.
However, recent comments from the central bank officials sided more towards further raising interest rates. Meanwhile, the Bitcoin price reacted positively to Powell’s initial remarks.
Ben S. Bernanke, former Fed Chair and the 2022 Nobel Memorial Prize recipient, also participated in the panel discussion. He spoke about the recent crisis around US regional banks. Referring to the Silicon Valley Bank collapse, Bernanke emphasized on the market contagion that led to the bank withdrawals, causing a widespread financial impacts on the US economy. In that respect, I think it was similar to the Global Financial Crisis, he added. He said that overall, borrowers are in a much better shape in the recent crisis unlike the global financial crisis.
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