• Crypto and stocks reacted negatively to comments about US inflation by Fed Chair Jerome Powell.
• Bitcoin traded to lows of $22,120 while the S&P 500 fell 1%.
• Investors are now likely to turn their attention to the next Fed meeting in March.

Fed Chair Jerome Powell Hints at Higher Rates

Cryptocurrencies, stocks, and bonds all reacted negatively after Federal Reserve Chair Jerome Powell hinted that interest rates could go up in order to combat higher than expected inflation. Bitcoin traded down towards support around $22,100 while the S&P 500 fell by 1%.

Market Reaction

During his testimony before Congress on Tuesday, Powell stated that recent economic data suggests the need for faster tightening which could lead to higher interest rates. This sent shockwaves through both the crypto and stock markets as investors sold off their positions. Ethereum also dropped towards support near $1,540 as investors weighed in on the news.

Economist’s Take

Economist Mohamed El-Erian pointed out how market participants had reacted to Powell’s comments and what they project for future monetary policy decisions from the Federal Reserve. He noted that despite dovish comments from the last press conference, Powell was now tilting more hawkish with his remarks—triggering sell-offs in stocks and bonds as investors awaited responses to questions from Congress members.

Next Meeting In March

Following these developments, investors will likely be looking ahead with anticipation at the next Federal Reserve meeting scheduled for March this year. At this time it is unclear what direction monetary policy will take but any changes made could have far-reaching implications across financial markets.

Conclusion

The reaction from cryptocurrencies, stocks and bonds after Jerome Powell’s hints of higher rates shows just how sensitive market participants can be when it comes to monetary policy decisions from central banks like The Fed. With a new meeting coming up soon investor sentiment is sure to remain volatile until then as markets wait for clarity on where policies may move going forward.