Federal Reserve Chair Jerome Powell began his two days of testimony before the U.S. Congress on Wednesday.
This meeting on Capitol Hill follows the 8.6% uptick in the consumer price index (CPI), which came out last month — this was the highest increase since December 1981.
Updates on the status of the economy and the Fed's intentions to reduce inflationary pressures not seen since the 1980s are expected from the head of the central bank.
While Powell took various questions on monetary policy, Sen. Kyrsten Sinema (D-AZ) asked about the crypto markets:
“The crypto markets have experienced substantial volatility in the past several weeks. Has the Fed been tracking these events, and what implications do they have for how the Fed is viewing the broader economic outlook in making decisions with respect to monetary policy?”
See Also: Jerome Powell Tells Congress The Fed Is 'Moving Expeditiously' To Fight Inflation
Powell responded: “We are tracking those events very carefully, of course, and not seeing significant macro-economic implications. But, I think the principal implication is what we’ve been saying for some time, which is that in this innovative new space, really there is a need for a better regulatory framework. The same activity should have the same regulation, no matter where it appears, and that isn’t the case right now.”
It is important to note the entire cryptocurrency market cap is $889.25 billion versus the American GDP, which is $25.34 trillion, and an equities market that controls more than $49 trillion.
“A lot of the digital finance products [available] are quite similar to products that had existed in the banking system or the capital markets. But, it's not regulated the same way. I think that is the main takeaway I would have,” said Powell.
Photo: Federal Reserve
