Bitcoin wavered at its $20,000 support level again as Federal Reserve Chairman Jerome Powell testified in front of US Congress on Wednesday. He promised to continue fighting inflation by raising interest rates – a tone that’s frequently spooked crypto markets in the past.
- Bitcoin sits at $19,940 at the time of writing. That’s down from $20,400 at 15:40 UST – just 30 minutes prior.
- This comes after the cryptocurrency had initially spiked earlier during Wednesday’s hearing, up to $20,850 at 14:30 UST.
- At the hearing, Powell told Congress that the Federal Reserve can and will stay committed to bringing down inflation.
- “We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so,” he said.
- The chairman anticipates that bringing down prices will necessitate further interest rate hikes, going beyond the 1.75% to 2.0% policy rate it currently operates.
- Last month alone, the Fed raised rates by 75 basis points – a move it didn’t believe would be required in the previous month. However, with inflation running hotter than expected, the central bank is prepared to get more aggressive until it finds “compelling evidence that inflation is moving down.”
- The chairman stated that strong labor market conditions leave the U.S. prepared for further hikes. However, according to Zerohedge, Powell also claimed it would be “very hard to achieve a soft landing” for the economy.