Bitcoin must adhere to current regulations, says the Fed. Bitcoin showed a balanced behavior when it reached 20,000 dollars per unit.
The president of the Federal Reserve of the United States, Jerome Powell, highlighted before the congress that more regulation on activities with bitcoin and other digital assets was required. Although the bitcoin price fluctuated moderately lower after the revelation, it has since recovered and is holding around $20,300 this Thursday.
Powell stood before the Committee on Banking, Housing, and Urban Affairs to show the Monetary Policy Report. This report gets submitted by the Banking Committee twice a year. In this way, we had some advances in what the American economy holds for the rest of the year.
In his earlier statement, Powell explained that inflation surpassed the Fed’s target of 2% this year. Regarding the inflation of 8.6% registered last year, Powell aimed at interest rate increases as the most prominent procedure to minimize the high peaks of the price of products and services.
More Regulation for Digital Assets
Arizona Senator Krysten Sinema referred at the event to the fact that digital assets experienced considerable volatility in recent weeks. Given this situation, he asked Powell if the Fed was aware of this matter and what consequences it would carry for the economic system.
The fact that Powell flagged the need for more regulative policies for bitcoin and the other digital assets had no apparent impact on the price. The ratification of the upcoming increases, executed when the Fed highlighted the 75 basis point increase, had a calming effect on investors.
The price moved through a sum registered at USD 20,567, a level similar to the one it had last Monday 20th. Bitcoin shows decay parallel with the beginning of the year of 55.4% and a 35% drop so far in June. This last amount is the most prominent monthly decrease experienced in 2022.
Powell Excluded a Recession Situation
Regarding the prospects for the economy in the following months, many senators openly pointed to the concern that the procedures to control inflation, which restrains spending and consumption, could cause a recessive period.
An increasing number of institutions observe a high probability of a recession in the next year. Powell, however, still says that predicting recessions is considerably difficult, though he highlighted that he does not see the risk as high.
Powell said the US economy is still strong, and spending is strong. Consumers are robust enough, businesses are in good shape; monetary policy is famous for being a blunt tool, and there is a risk that weaker results are certainly possible, but that is not the primary goal.
By: Jenson Nuñez
