The group's chairman, Jerome Powell, said the Fed indicated it was ready to raise interest rates further if circumstances warranted such drastic measures.
Bitcoin’s reaction was an immediate plunge in price, pushing it down roughly $400 in a matter of minutes. Most financial markets, especially cryptocurrencies, have calmed down over the past few days in anticipation of Jerome Powell testifying to Congress about the central bank's upcoming monetary plans.
Speaking before the Senate Banking Committee on Tuesday, the Fed chairman suggested the group may raise key interest rates more than previously expected. This is contrary to what most experts believe, as the prevailing assumption is that the Fed will not push rates above 6%. "The latest economic data was stronger than expected, suggesting that the final level of interest rates may be higher than previously expected," Powell said.
The stagnation in the cryptocurrency market was broken by comments from the Fed chair. As previously reported, BTC has stalled around $22,400 without any major moves for several days.
Shortly after Powell's warning, however, bitcoin plunged more than $400 and fell below $22,000, hitting a three-week low. It’s worth noting that more events and announcements from the US this week could lead to further price volatility.
