Bitcoin Climbs Above $22K as Powell Softens Tone on Day 2 of Congressional Testimony

The Fed chair said no decision has yet been made on the size of the coming March rate hike.

AccessTimeIconMar 8, 2023 at 4:08 p.m. UTC
Updated Mar 8, 2023 at 7:59 p.m. UTC
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U.S. Federal Reserve Chairman Jerome Powell "stressed" that the central bank has yet to make a decision on the size of the rate hike when the Federal Open Market Committee (FOMC) meets later in March.

Testifying before the House Financial Services Committee for his semi-annual monetary policy report on Wednesday, Powell made a notable change (from Tuesday's Senate testimony) in his prepared remarks. "I stress that no decision has been made on this," Powell added Wednesday when talking about the pace of rate hikes.

Markets on Tuesday took Powell's prepared remarks as suggesting the Fed was likely to hike rates 50 basis points at the FOMC's March meeting instead of the previously assumed 25. Bitcoin and stocks both saw sizable declines and the dollar a powerful rally following the testimony. The insertion of the "no decision" wording Wednesday could be an attempt to soothe those hawkish fears.

Bitcoin (BTC) bounced more than $200 on the news, now back above $22,000 at $22,200, and the S&P 500 moved from a modest loss to a modest gain. The dollar is giving back some of Tuesday's sizable advance.

Powell said there's a number of important economic reports to be released between now and the FOMC's March 21-22 meeting – this Friday's February payrolls report and next week's inflation figures among them – and the incoming data will play an important role in guiding the rate decision.

While crypto came up during Wednesday's hearing, it was not a major issue even among lawmakers who tend to be outspoken on the sector.

Powell did say the Fed had yet to make any decisions on issuing a potential central bank digital currency (CBDC) in response to a lawmaker's questions.

"We're not making any real decisions, we're doing kind of early stage experimentation – how would this work? Does it work? What's the best technology, what's efficient – early stage, but we're making progress on technological issues," he said.

Nikhilesh De contributed reporting.

CORRECTION (March 8, 2023, 17:08 UTC): Corrects the day the dollar gave back its sizable advance in the fourth paragraph.

UPDATE (March 8, 17:55 UTC): Adds additional detail from hearing.


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Stephen  Alpher

Stephen Alpher is CoinDesk's managing editor for Markets. He holds BTC above CoinDesk’s disclosure threshold of $1,000.

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