- Federal Reserve Chair Jerome Powell says “We Won’t Run Out of Money”
- Bitcoin surges 20% to a 24-hour high of $9460
On Thursday, Federal Reserve issued a press release regarding the current economic state. According to the press release, the Federal Open Market Committee (FOMC) “decided to maintain the target range for the federal funds rate at 0 to 1/4 percent.” and continue to provide monetary support to businesses in need.
Following the statement, the chair hosted a virtual press conference allowing reporters to ask questions about the Fed’s plans.
Around the 30 minute mark, Victoria Guida, a reporter from Politico, asked the chair about concerns over increased fiscal spending. Powell responded with the following.
And the second thing is we won’t run out of money. You know, it’s not a limited pot.Jerome H. Powell (Chair of Federal Reserve)
This comes as the pay Paycheck Protection Program (PPP) runs out of money just two weeks after launching. With the chair claiming that they will continue to provide stimulus funds many raise concerns over growing inflation.
We have not been on such a path for some time, which means that the debt is growing faster than the economy. This is not the time to act on those concerns. This is the time to use the great fiscal power of the United States to do what we can to support the economy and try to get through this with as little damage to the longer run productive capacity of the economy as possible.Jerome H. Powell (Chair of Federal Reserve)
Furthermore, the chair mentions that US debt is increasing rapidly amid COVID-19. During the same time frame, digital assets have seen a rapid increase in interest, possibly due to their limited supply acting as a hedge against inflation.
Bitcoin Surges 20%
Bitcoin surges over 20% from $7,600 to over $9,400 within 24 hours. The breakout comes less than two weeks before the hyped Bitcoin halving. The halving will reduce to block reward from 12.5 BTC to 6.25 BTC reducing new supply drastically.
Furthermore, as the Federal Reserve Chair says “We Won’t Run Out of Money”, US inflation rates continue to rise. However, post-halving, Bitcoin’s annual inflation rate will halve to 1.8% per annum. This is less than the current inflation rate of the US dollar.
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