Bitcoin (BTC) shot up to $11,600 on August 27 when the U.S. Federal Reserve pledged to maintain an average inflation rate of 2%.
Data from Coin360 and Cointelegraph Markets showed that the BTC/USD pair rose by several hundred dollars on Thursday when Federal Reserve Chairman Jerome Powell gave a speech on the state of the economy.
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Powell: Inflation Can Rise „Moderately Above 2
The markets had been waiting for signs of reorientation of inflation, with rumors previously suggesting that the Fed would allow rates to rise to 4%.
In the event, Powell confirmed that inflation would be allowed to rise above the Fed’s 2% target, but only temporarily.
„After periods where inflation has been below 2 percent, appropriate monetary policy will probably aim to achieve inflation moderately above 2 percent for some time,“ Powell summarized.
„In trying to achieve inflation that averages 2 percent over time, we are not tying ourselves to any particular mathematical formula that defines the average.
At press time, after his comments, the Bitcoin Profit was down about $11,390, down 0.7 percent on the day amid higher volatility.
Pressure was felt from the Federal Reserve’s comments
As Cointelegraph reported, expectations were already high that any overshoot of inflation would boost safe haven assets and affect the U.S. dollar.
Gold shot up to more than $1,970 as data came in from the Fed, an increase of more than $30 from around $1,940 during the week.
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XAU/USD 1-day chart
At the same time, the USD index, which had fallen to a two-year low in recent weeks, fell even further when the speech began, and then rebounded to roughly where it had left off on Wednesday.
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„In conducting monetary policy, we will remain very focused on fostering the strongest possible labor market for the benefit of all Americans,“ Powell concluded.
„And we will strongly seek to achieve a 2 percent inflation rate over time.