Global financial market took a hitting on Nov. thirty after comments from U.S. Federal Reserve Chair Jerome Powell hinted that inflation and the Omicron COVID-xix variant are growing threats and that the bank's easy money policies could cease sooner than anticipated.

Prior to Powell's comments, Bitcoin (BTC) had been on the ascent and the digital asset had rallied vi% from a low of $55,840 in the early trading hours on November. thirty to an intraday high at $59,200, merely the toll was hammered back below $57,000 after the Fed'southward remarks.

BTC/USDT 4-hour chart. Source: TradingView

At the fourth dimension of writing, Bitcoin has managed to climb dorsum to $58,000 but a serial of technical indicators signal that traders are not confident well-nigh BTC'due south next move.

Stocks and commodities have a hit

Information technology wasn't just Bitcoin that was hard hit by the Fed'south comments. Co-ordinate to economist and CryptoQuant annotator Jan Wuestenfeld, the dollar index (DXY) increased while the DOW, gilt and other equities indexes pulled back.

DXY vs. Gold vs. BTC/USD vs. SPX. Source: Twitter

Wuestenfeld said,

"United states of america dollar index appreciating on Powell remarks that the FED might speed upwards taper (no matter how conceivable). Everything else going downwards. Gold included."

Related: Vladimir Putin says cryptocurrencies 'bear high risks'

The Fed "behaves in a binary style"

Deeper insight into the actions from the Fed was provided by marketplace annotator and former treasury employee Nik Bhatia, who highlighted the fact that the Fed "doesn't have the ability to react to dynamic conditions" and instead "behaves in a binary way."

Bhatia said,

"If things are going well, it tin tighten policy. If the economy is in problem, it eases policy."

Co-ordinate to Bhatia, "inflation is running hot in the The states" with "headline statistics pointing to multi-decade loftier increases in amass cost levels."

At the same fourth dimension, the Fed has implemented "a budgetary policy at essentially the easiest it has ever been," leading Bhatia to caution that "with inflation waking up, this volition presently come to an stop."

Bhatia said,

"The Fed is conspicuously heading into a policy error in which it tightens policy despite longer-term growth and inflation expectations coming down, due to tighter monetary policy itself (that'due south why it's chosen policy error)."

It'southward no longer "transitory inflation"

Interstingly, Powell's comments acknowledged that the yr-long mantra of "transitory inflation" is now coming to an end, with the Federal Reserve chair suggesting that it'south time to "retire" the transitory narrative.

While it's refreshing to see a bit more honesty coming from the Fed, cryptocurrency pundit Anthony Pompliano pointed out that the average person knew all forth that the inflation was anything but "transitory" in nature and will likely remain an issue well into 2022.

The overall cryptocurrency market cap now stands at $two.638 trillion and Bitcoin's dominance rate is 41.2%.

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