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CNBC's Mad Money host Jim Cramer recently shared his take on Fed Chair Jerome Powell's remarks from the Fed's two-day meeting that just ended.
Federal Reserve Chair Jerome Powell suggested that raising interest rates was unlikely to be the Fed's next action. Officials would need to see compelling evidence that the policy is not tight enough to bring inflation back to its 2% target.
Cramer told investors to believe Federal Reserve Chair Jerome Powell when he hinted on Wednesday that a rate hike was improbable, despite persistent inflation.
Although Powell's comments temporarily calmed the markets, Cramer indicated that investors might become concerned again as job data will be announced on Friday. The numbers could provide more information about whether the economy is slowing or accelerating.
Tomiwabold OlajideEven though Powell stopped short of signaling rate cuts were likely this year or that rates were at a peak, Cramer said that the Fed chief had managed to take "the dreaded rate hike scenario off the table."
Given Cramer's history of making predictions that turn out contrary, particularly in the crypto market, this raises the question of the implications of the recent developments on the macro front for cryptocurrencies.
Implications for cryptocurrencies
Historically, Bitcoin has had four April declines in the last decade, three of which foreshadowed May losses of 18% on average, according to Bloomberg data.
Still, if inflation pressures ease and markets resume bets on a much looser Fed stance, cryptocurrencies and other speculative assets may see some respite.
The Fed has maintained interest rates steadily in the 5.25%-5.5% range for nearly nine months, and Powell's statements did not imply that the central bank is inclined to drop rates anytime soon.
It is unusual for interest rates to hold steady for more than a year. That said, the lagging impact of higher-for-longer rates remains a concern for risk assets like cryptocurrencies. This could be a tail risk that might keep bulls at bay.
Alex Dovbnya
Vladislav Sopov
Dan Burgin
U.Today Editorial Team