Bitcoin fell 1.5% to $ 83,700 in the remarks of the president of the Federal Reserve Jerome Powell at the Chicago Economic Club on Wednesday.
Powell said recent tariff increases imposed by President Donald Trump’s administration were greater than expected and could produce more persistent economic effects. He said inflation should temporarily increase due to prices, but added that it was too early to determine the long -term impact. “We can find ourselves in the difficult scenario in which our double mandate objectives are in tension,” said Powell, referring to the objectives of Fed and Employment Price Stability.
While Trump’s commercial strategy focuses on China, investors remain uncertain how future stairs could influence the Fed decisions. Last week, Trump reduced the 10% “reciprocal” prices for most countries. Economists say that the probability of a recession has decreased since then, although inflation problems persist.
During the same event, Powell addressed developments in digital assets, saying that stablecoins “could have a fairly wide call” if they are accompanied by consumer protections. He stressed that the efforts spent to create a legal framework for the stablescoins failed, but said that the congress now revisits the problem. “We need it. There is none now,” he said.
Powell’s comments arrive while the Trump administration is advancing with the policy linked to the crypto. Trump trained the President’s Council for Digital Assets earlier this year, led by Bo Hines. Speaking at a summit in March, Hines said that a stable bill could reach Trump’s office within two months. The Chamber and the Senate adopted the legislation of the stablescoin outside the committee.
The regulatory position on cryptographic banks also changes. Powell said that even if the regulators had adopted a cautious approach, there could be relaxation. He underlined the need to balance innovation with financial security. The Federal Deposit Insurance Corporation (FDIC) recently announced its intention to withdraw previous directives, allowing banks to engage in cryptographic activity without prior approval. The currency controller office (OCC) also clarified its position supporting the involvement of cryptography in federal banks.
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