Yesterday (May 17), American TV network CBS aired an episode of its highly popular weekly news program "60 Minutes" that featured an interview correspondent Scott Pelley had done with the Federal Reserve Chair Jerome Powell on Wednesday (May 13). What Powell said during that interview could have helped the price of Bitcoin go above the $9,900 level earlier today.
When Pelley asked Powell what kind of "economic reality" people in the U.S. "need to be prepared for", Powell replied:
"Well, I would take a more optimistic cut at that, if I could, and that is: this is a time of great suffering and difficulty.
"And it's come on us so quickly and with such force, that you really can't put into words the pain people are feeling and the uncertainty they're realizing. And it's going to take a while for us to get back.
"But I would just say this. In the long run, and even in the medium run, you wouldn't want to bet against the American economy. This economy will recover...
"It may take a while... It could stretch through the end of next year. We really don't know. We hope that it will be shorter than that, but no one really knows."
As for how much the U.S. GDP could decrease in Q2 2020, Powell said that the percentage decline "could easily be in the twenties or thirties." However, Powell does "expect that there'll be growth in the second half [of the year]."
Perhaps, the most interesting part of the conversation -- as far as those people who are interested in Bitcoin as an inflation hedge is concerned -- was the part where Pelly asked Powell if it was correct to say that the Fed "simply flooded the system with money."
Powell said:
"Yes. We did. That's another way to think about it. We did."
Pelley then asked where this money come from and if the Fed had just printed it?
Powell answered:
"We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds for other government guaranteed securities. And that actually increases the money supply.
"We also print actual currency and we distribute that through the Federal Reserve banks."
According to data from CryptoCompare, shortly before this episode of 60 Minutes aired, Bitcoin was trading around $9,637, but within less than two hours after this episode ended, Bitcoin was trading at $9,925.
