The Federal Reserve is increasingly wary of the risk of stagflation. This is a disturbing mix of slowing growth and an increase in increases that could challenge policymakers.
Chairman Jerome Powell argued that the economy is in “good condition” and emphasized that central banks are in a “good position to wait and see” before changing policies.
The US Central Bank today has stabilized benchmark interest rates, acknowledging the increased risk of increased inflation and unemployment. That scenario would stimulate a weakened economy without further fueling inflation as central banks operate in limited rooms.
“The Fed is worried about stagflation,” Zach Pandl, Grayscale’s research director, was posted to X after the decision. “I think the outcome is good for Bitcoin.”
In a previous report, Pandl argued that rising tariffs contributed to the stag. This has historically damaged traditional assets, but has benefited rare storages, worthy of gold. “Bitcoin wasn’t about the stags of the past,” he writes.
Bitcoin was traded to a tough extent following the Fed’s announcement and Powell’s remarks. Optimism over US-China trade talks has returned to $96,500 in the last 24 hours, up 1.6%, after touching on $97,500 in the first half of $97,500.
The wider gauge of the Crypto market, the Coindesk 20 Index (CD20), rose just 0.3% over the same period, and fell 1%-3% in XRP, Avax, Uni, Near and Aave.
Meanwhile, the stock recovered modestly from previous losses, with the S&P 500 and NASDAQ rising 0.4% and 0.3% respectively.