Powell's Congressional testimony boosts stocks, but crypto stays stagnant

On his second day of testimony before Congress, U.S. Federal Reserve Chair Jerome Powell said recent data shows "modest further progress" on inflation. Equity markets interpreted the statement positively. However, major cryptocurrencies failed to be moved by the central banker's dovish tones.

Stocks ticked higher after Powell's Capitol Hill statement. The SP 500 climbed 0.26% in early trading, and the Nasdaq increased by 0.42%. On the other hand, Bitcoin remained stuck within its tight 24-hour range between $57,500 and $59,000, unmoved by any risk-on sentiment in equity markets.

"More good data would strengthen our confidence that inflation is moving sustainably towards our 2% goal," Powell added, indicating that the Fed is looking for continued positive trends before changing the current rate. According to the Chicago Mercantile Exchange (CME) FedWatch tool , interest rate traders have set the chances of a rate cut in September at 71.8%.

Greater confidence needed before rate cuts

"Most recent monthly readings have shown modest further progress on inflation," Powell said. He noted that long-term inflation expectations remain "well-anchored," citing a broad range of surveys from households, businesses, and economic forecasters, as well as financial market measures.

"A restrictive monetary policy is helping to bring supply and demand into balance, and put downward pressure on inflation," Powell explained. He emphasized that the committee would not consider reducing the target range for the federal funds rate until there is greater confidence that inflation is moving sustainably towards the 2% target.

The largest digital asset by market cap was changing hands at around $57,701 at the time of writing, falling from a daily high of around $59,322, according to The Block’s price page .