Federal Reserve Chairman Jerome Powell says the central bank is “not really seeing significant macroeconomic implications” from crypto’s volatility. Fed Chair Jerome Powell stressed that a better regulatory environment for crypto is needed.
Fed Chair Powell: Crypto Requires Better Regulation
Federal Reserve Chairman Jerome Powell testified before the Senate Committee on Banking, Housing, and Urban Affairs on “the semiannual monetary policy report to congress” Wednesday.
Senator Kyrsten SInema (D-AZ), questioned him about whether the Fed had been monitoring crypto activities in light of recent market volatility and what impact this has on the overall economic outlook.
“We are tracking those events very carefully, of course,” Powell replied, elaborating:
[We are]So far, we are not seeing any significant macroeconomic consequences.
“The principal implication is really what we’ve been saying, and others have been saying for some time, which is that in this very innovative new space, really, there is a need for a better regulatory framework,” he emphasized.
Powell went on:
The same activity should have the same regulation no matter where it appears and that isn’t the case right now.
In March, the Fed chair said: “Our existing regulatory frameworks were not built with a digital world in mind … Stablecoins, central bank digital currencies, and digital finance more generally, will require changes to existing laws and regulation or even entirely new rules and frameworks.”
On Wednesday, Powell told the Senate Banking Committee that the Fed is committed to bringing down inflation. “At the Fed, we understand the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so,” he said.
Regarding the U.S. economy possibly sliding into a recession, he stressed: “It’s not our intended outcome at all, but it’s certainly a possibility, and frankly the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2% inflation and still a strong labor market.”
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