The federal reserve is increasingly attentive to the risks of stagflation – an uncomfortable mixture of slowdown in growth and the increase in inflation which could challenge decision -makers.
While President Jerome Powell insisted that the economy was in “good shape” and stressed that the central bank was in “good position to wait and see”, before changing the policy, subtle changes in the Central Bank policy statement underlined increased concerns concerning the direction of the economy.
Holding its stable reference interest rate today, the American central bank has recognized the growing risk of increase in inflation and unemployment – roughly the definition of stagflation, which made an appearance for the last time throughout an important part of the 1970s. This scenario would leave the central bank with a limited place to maneuver to stimulate a weakened economy without further feeding.
“The Fed is concerned about stagflation,” said Zach Pandl, research manager in Grayscale, published on X after the decision. “We believe that this result would be good for Bitcoin.”
In a previous report, Pandl argued that the increase in prices contributes to stagflation, which historically makes traditional assets injured but benefits rare value reserves like gold. “Bitcoin was not there for past stagflations,” he wrote, “but can be considered a rare digital goods and is increasingly considered a modern value store.”
Bitcoin exchanged in a tight fork after the Fed’s announcement and Powell’s remarks. He briefly affected $ 97,500 earlier on optimism around American commercial talks before returning to $ 96,500 – up 1.6% in the last 24 hours.
The Coindesk 20 index (CD20), a wider gauge in the cryptography market, only increased by 0.3% over the same period, weighed down from 1% to 3% of XRP, Avax, Uni, Una and Aave.
Meanwhile, the actions have been modestly given from previous losses, the S&P 500 and the NASDAQ closing 0.4% and 0.3% respectively.
