In a speech given in Wyoming on August 25, Federal Reserve Chair, Jerome Powell, described existing inflation levels as “too high” despite aggressive interest rate hikes dating back more than a year. 

According to Powell, “We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

Powell’s comments are made on the back of stronger-than-expected growth experienced by the US economy, with consumers continuing to spend and drive up prices. 

“We are attentive to signs that the economy may not be cooling as expected,” 

Though Powell conceded that inflation has waned over the past year, the Federal Reserve is ready to raise interest rates further to bring inflation down and in line with the 2% target level. 

“The lower monthly readings for core inflation in June and July were welcome, but two months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,”

‍How Will This Impact The Cryptocurrency Markets?

So far, crypto market sentiment has remained relatively strong in light of Powell’s hawkish comments today. Though Bitcoin (BTC) saw a sudden drop shortly after Powell’s speech, the dip was brief and Bitcoin has traded largely sideways on the 24-hour.

Historically, interest rate hikes have pushed investors away from riskier assets like cryptocurrency. However, the full effect is yet to be seen, and so too are specific changes in rates.