Fed Chairman Jerome Powell commented on the surging rise in value for assets like DOGE and GameStop stock

During a press conference on Wednesday, Jerome Powell, chairman of the Federal Reserve, was asked about the sudden rise in the value of some assets, such as Dogecoin (DOGE). He also gave his thoughts on the wilder elements of U.S. markets.

Yahoo Finance also posted the following video interviewing Powell:

Fed Chairman Jerome Powell commented on the surging rise in value for assets like DOGE and GameStop stock

During yesterday’s online press conference, Yahoo Finance’s correspondent Brian Cheung asked the Chairman if recent market events would make the relationship between low rates and monetary policy easier for those who don’t. stuff like that or not. In fact, Cheung’s question regarding potential concerns about financial stability related to the rise in GameStop stock and the massive increase in Dogecoin’s value.

Cheung also asked if the Fed was concerned about financial stability, given such wild price swings.

Powell stated but did not mention either dogecoin or Gamestop in his response:

“Many people just look at asset prices and they look at some of the things going on in the equities markets. And I think they reflect froth in the equities markets. But really we try to stick to a framework so that we can talk about it and be held accountable for it. Some of the asset prices are high. You are seeing things in the capital markets that are a bit frothy. That’s a fact. I won’t say it has nothing to do with monetary policy, but it also has a tremendous amount to do with vaccination and reopening of the economy.”

Powell denied concerns that quantitative easing had caused the froth in question. “Froth” is an investment term that suggests that an asset price is no longer in line with its intrinsic value. It is typically used when the price of an asset rises past its objective value. It can be a precursor to a market bubble popping, something that longtime crypto enthusiasts know well given the early 2018 market crash, and points to overconfident investors attempting to push an asset’s value beyond what it is reasonably worth.

In Powell’s view, U.S. monetary policy – which includes low-interest rates and recent COVID-19 stimulus payments – has played a role in such asset appreciation. However, he also sees new market entry from COVID vaccinations, spending money, and returning to pre-pandemic routines and activities.

Dogecoin’s value soared from less than $ 0.01 per coin in January to a peak price of just under $ 0.42 earlier this month. The surge has been fueled by celebrity supporters like Tesla CEO Elon Musk – whose constant tweets lead to a price spike – and billionaire investor Mark Cuban, whose Dallas Mavericks NBA team began accepting Dogecoin as a payment option for team goods in March.

This week, Cuban tweeted that mobile trading platform Robinhood, which currently does not allow users to withdraw or spend DOGE they buy in the popular app, is holding back the further development of the coin meme. Cuban points to the Mavericks’ success with Dogecoin orders, with an estimated 6,000 such purchases expected in April, as proof that DOGE is a cryptocurrency that everyone realizes. the desire to spend instead of just holding on to future value.

However, the investment definition of “froth” cannot help but reiterate the so-called “Doge Day” last week, an effort led by Dogecoin investors on social media to boost the value of the coin. $ 1 or more on April 20. The plan has backfired: Dogecoin’s price has finally dropped 20% within 24 hours.

However, at its current price of $ 0.31, Dogecoin has risen 469% in the past 30 days, nominally and 31 times more valuable than the price before the price spike in late January. No, that a lot of investors appreciate the so-called crypto “joke” right now.

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