Fed Chairman Jerome Powell Says Dogecoin and Gamestop Hype Emphasizes ‘Foam in Stock Markets’

Federal Reserve Chairman Jerome Powell discussed a number of topics such as inflation and central bank digital currencies (CBDCs) this week following the multi-day Federal Open Market Committee (FOMC) meetings. The central bank’s chief executive was asked about feverish stocks like Gamestop stocks and the crypto asset dogecoin. Powell said the Federal Reserve is committed to financial stability, but notes that some things in the capital markets are a bit frothy.

Fed chairman on inflation: the commission aims for inflation moderately above 2%

This week’s FOMC meetings revealed that the US central bank intends to continue its monetary easing policy until it is satisfied with the economic effects of the pandemic. The FOMC meetings were also followed by press conferences where Fed Chairman Jerome Powell answered questions from a number of different news agencies. Powell discussed benchmark interest rates and inflation, while also being asked about digital currencies and things like Gamestop stocks and the recent dogecoin (DOGE) rally.

Initially, Powell was inundated with questions about inflation, and one reporter stressed that some people think that “the Fed could get things out of hand with the new policy stance.” The reporter asked the Fed chairman if the central bank will be able to stay ahead of inflation before it gets well above the 2% target. Powell noted that since the Fed has been able to keep the inflation rate below 2% for “some time”, he stressed that “the committee will aim for inflation moderately above 2% for some time.”

Powell further noted:

[The Fed is] strongly committed to achieving our goals of maximum employment and price stability.

Despite China’s lead in creating a central bank digital currency, Powell says’ USD is still ‘the world’s reserve currency’

The Fed chairman was also asked whether the US is falling behind countries like China in the race to create a central bank digital currency (CBDC). “We feel an obligation to understand the technology and all policy issues very, very well,” Powell said in response to questions from the CBDC.

“Central bank digital currencies are now possible, and we will see some around the world,” Powell added. And we need to understand if that would be good for the people we serve. How would it work in our system? And there are some very, very difficult questions to answer, and we are in a serious program to understand both the technology and the policy issues. “

The Federal Reserve Chairman explained that the dollar is still very powerful in his eyes, emphasizing that the USD is “the world’s reserve currency.”

“That means the dollar is used in transactions all over the world, much more than any other currency. And that’s because of our rule of law, our democratic institutions, which are the best in the world, our economy, our diligent people, all the things that make the United States the United States, ”Powell said.

Gamestop Shares and Dogecoin

One reporter noted the hype that has surrounded certain markets, such as dogecoin (DOGE) and Gamestop stocks. The journalist said people are looking for “returns in this market” and wondered if the Fed felt responsible for the current financial stability in America. “Is there any concern about financial stability from the Fed’s perspective at this point?” the reporter asked the Fed chairman. Powell responded, saying that the financial stability that the Fed provides is quite broad, and that the central bank doesn’t jump at one point and then move onto the next.

“Financial stability is real to us, we have a broad framework. So we don’t just jump from one thing to another, ”Powell replied. “I know a lot of people just look at asset prices and they look at some of the things that are happening in the stock markets that I think reflect the foam in the stock markets. But really we’re trying to stick to a financial stability framework so that we can talk about it the same way every time, and so we can be held accountable for it, ”added the Fed chairman.

Just as Powell has protected the megabanks by referring to the so-called “strength” of the financial incumbents in the past, this week he repositioned Wall Street banks as strong financiers.

“Using the financial system is no problem. We have very well-capitalized big banks, ”Powell emphasized at the press conference.

What do you think of Jerome Powell’s commentary on inflation, CBDCs and capital markets being frothy? Let us know what you think about this topic in the comments section below.

Tags in this story

2% Inflation, Americas, CBDC, Central Bank Digital Currency, China, Doge, Dogecoin, Dogecoin (DOGE), Fed, Fed Chair, Federal Reserve, Froth, GameStop, Gamestop Stocks, Inflation, Jerome Powell, USA, USD

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