Bitcoin prices have recovered to over $60,000, reflecting a reassessment by the market of the future of the Fed's interest rate hike. In a statement at the European Central Bank forum on 1 July, Federal Reserve Chairman Vol Walsh stated that inflation risks had diminished in the recent past, a statement that rapidly affected markets, including encrypted money and gold.
Address by Vol Walsh, Chairman of the Federal Reserve
Vol. Walsh acknowledged at the forum that inflation risk had “reduced”, but did not provide clear guidance for future interest rates. This vague statement allows the market to read that the Fed may adopt a more patient interest-rate strategy. In contrast, the data on non-farm employment in June had increased by only 57,000 jobs, far below the expected 110,000, which further reduced the pressure for higher interest rates.
Market responses
The recovery of bitcoin is increasingly linked to macroeconomic signals. Bitcoin prices rose rapidly after Vol. Walsh spoke, and gold prices reached $4,179.94 per ounce, while silver rose by 2.3 per cent to $62.43. The market's projected interest rate increase in September fell to about 54 per cent, indicating a significant change in perceptions of interest rate hikes.
Future outlook
Despite positive market reactions, half of the officials within the Fed are expected to increase interest rates at least once before the end of the year. Val Walsh ' s statements, while conveying concerns about inflation risk, did not change the fundamental position of the Fed, and future data will still determine policy direction. Bitcoin is more relevant to macroeconomic data, and future employment reports and Fed statements will directly influence its price trends.