KANALCOIN NEWS – This week, the Federal Open Market Committee (FOMC) has appointed the United States central bank, the Federal Reserve (Fed), to continue monetary easing policy. The goal is to manage the impact of the COVID-19 pandemic on the economy to run smoothly.
Federal Reserve Chair Jerome Powell discussed a number of topics, such as inflation and central bank digital currencies (CBDC). He discussed this topic after meeting a few days ago with the FOMC.
During the meeting, the central bank’s lead director was asked about the rising stocks. Powell said that there are Gamestop shares and Dogecoin crypto assets which are currently the prima donna of society.
Powell stated that the Federal Reserve is here to provide financial stability, it’s just that he noted that there were several things in the capital market that needed to be fixed.
The FOMC meeting was also followed by a press conference, where Powell, who also serves as chairman of the FOMC, discussed several topics. Some of them are reference interest and inflation.
Apart from that, a number of media have asked about digital currency and other things like Gamestop shares, as well as dogecoin (DOGE). Therefore, in the press conference, Powell also answered the questions raised.
Initially, Powell was inundated with questions about inflation. One reporter, who was not named, emphasized that some people believe in the Fed. Because of this, perhaps things like inflation might be left unchecked, so that they cannot be controlled by the new policies of the local government.
The reporter asked, will the central bank be able to overcome inflation before it exceeds the target of 2%? However, Powell noted that the Fed has at times been able to keep the inflation rate below 2%. He also highlighted that the gauges committee has recorded inflation above 2% in recent times.
“(The Fed) is very committed to achieving your goals, namely maximum employment and price stability,” said Powell as Kanalcoin.com quoted from News.Bitcoin.com.
Even though China is presenting a digital currency through its central bank, Powell emphasized that the USD is still the world’s currency. The chairman of the Federal Reserve was also asked about the United States’ lagging behind in its move to create a central bank digital currency (CDBC).
However, Powell believes that the United States is still obliged to understand the technology and all policies well. Currently, digital currencies may be accepted by several countries in the world. Powell said, his party also needs to understand whether this is a good thing for its users.
“Then how does the digital currency work in our system? There are some questions that are difficult to answer. We are also involved in a serious program to understand technology and policy issues,” continued Powell.
Furthermore, he also explained that the value of the dollar is still very strong. Not only that, Powell is also optimistic that the USD is still the world’s reserve currency. This means, continued Powell, that the dollar is often used for all transactions in the world. When compared to other currencies, the dollar is the most widely used.
“Of course, that’s because of the rule of law, our democratic institutions are the best in the world. Another thing is driven by the economy and the American people who are fairly diligent,” he concluded.
So, how does this relate to Gamestop and Dogecoin stock?
A reporter noted the hyped phenomenon in the stock and crypto markets. Crypto dogecoin (DOGE) and Gamestop stock for example, are booming.
The reporter said people are looking for returns in this market. He asked Powell, is the Federal Reserve responsible for America’s current financial stability? Is there a financial stability issue from a central bank perspective? In response to that question, Powell spoke up.
He told journalists that the financial stability provided by the central bank was quite extensive. So, he said, the central bank is not involved in a particular problem and moves on to the next problem.
“Actually, financial stability for us is having a broad framework. So, we don’t jump from one thing to another,” explained Powell.
He also added that the bank knows that not a few investors are watching asset prices. Most of the investors also see some things in the equity market. According to Powell, this reflects that there is “foam” in the equity market.
“But really, we’re trying to stick to the financial stability framework, so we can talk about it in the same way. The goal is for us to be held accountable for that,” said Powell.
Powell is positioning Wall Street banks as strong financiers this week. Therefore, he helped protect big banks by alluding to his strength. He emphasized that taking advantage of the financial system was not a problem. Moreover, the central bank has good capitalization.
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Image Credit: Unilad
