All financial markets out there, including crypto, stocks, and commodities market, are plummeting as a new strain of COVID-19 surfaced and is threatening the financial activity to drop significantly furthermore. On top of that, the Federal Reserve acknowledged that the inflation that is going on is not ‘temporary’ and, therefore, an imminent change in Fed policy must happen. The Federal Reserve chair, Jerome Powell, said earlier in an interview that the ongoing inflation and COVID-19 variant which has surfaced is making the situation direr, and the bank might suspend its easy monetary policies sooner than later.
This is obviously a very hard and complex step that the Fed needs to take right now to be able to soften the blow that inflation would cast on the country’s economy. Before Powell shared his thoughts, Bitcoin was doing alright for itself and was seeing a consistent rise, but after this statement has made out, Bitcoin has fallen almost back to the lows of $55K with no imminent signs of recovery taking place anytime sooner. According to various crypto market indicators interpreted and assessed, it is evident that the investors are not entirely confident with Bitcoin, and this could lead to a drop of overall trading taking place in the upcoming days, suggesting more rigorous downtime for Bitcoin in the upcoming days.
Inflation is a Growing Concern
It is not only Bitcoin that has sustained this heavy blow as others also share the damage; the stocks and commodities market has also undergone some corrections and, as a result, are seeing negative trends across the board. Every other index out there to monitor the financial moves for various markets only show a negative trend and demotivation, whereas the US dollar index shows a positive trend. According to a former treasury executive, Nik Bhatia, the Fed does act in strange and binary ways.
Such as it might ease down the policies if everything is going steadily and the economy is flourishing. Inflation is definitely a concerning matter worldwide right now; with new strains of COVID-19 still breathing down people’s necks, things might not settle for some time.