Following The Fed’s decision to stick with the widely expected 75 bps interest rate hike, crypto prices saw a general rally. BTC prices have increased by over 9% in the last 24 hours to cross $23.1K. On the other hand, ETH experienced a surge of over 13% in the last 24 hours to reach $1.6K.
However, Alfonso Peccatiello, a major influencer and author of The Macro Compass, stated his doubts over the crypto rally. While he attributed Fed chair Jerome Powell’s speech as the cause of the crypto rally, the lack of any forward guidance in Powell’s speech is an alarming aspect.
Peccatiello also revealed his own portfolio where he claims to have minimum exposure to any speculative risk assets like crypto.
Why Powell’s Speech Caused The Crypto Rally
According to Peccatiello, the markets and crypto did not start to rally convincingly until Powell’s declaration that the inflation levels are broadly in line with neutral interest rates. Powell also mentioned that following two consecutive large hikes of 75 bps, the Fed will be more data-driven going forwards.
However, as Peccatiello points out, any further interest rate hike from the Fed would put it in the actively restrictive zone. It is even more concerning that Powell mentioned another unusually large increase to potentially be the appropriate measure for the next FOMC meeting in September.
