Bitcoin turned lower along with U.S. stocks after Federal Reserve Chair Jerome Powell said Tuesday it may be time to retire the term “transitory” as a way of describing inflation.
Over the past year, Powell and other officials at the U.S. central bank have repeatedly used that term to suggest that the forces driving recent consumer-price increases might abate as the economy accelerates from coronavirus-related lockdowns.
So the shift in messaging by Powell, during testimony before a U.S. Senate panel, might signal that authorities now see the inflationary pressures as longer-lasting – potentially indicating that they might be less willing to continue the loose monetary policies that have buoyed markets for risky assets, including cryptocurrencies.
“It is time to retire the word ‘transitory’ regarding inflation,” Powell said during the hearing before the Senate Banking Committee.
The bitcoin price slid to about $57,000 as of press time, down from about $58,500 before the hearing started.
