The U.S. Federal Reserve has announced a significant policy change to push up inflation. Bitcoin is set to greatly benefit from this policy change. Not only the price of bitcoin could surge past $500K, but a number of companies have also begun moving their reserves into the cryptocurrency to hedge against higher inflation.
Fed Officially Set to Push Up Inflation
The Federal Open Market Committee announced on Thursday significant changes to its policy strategy. The announcement coincides with Fed Chairman Jerome Powell’s speech to a virtual meeting of the annual Jackson Hole economic symposium.
All 17 top Fed officials agreed to a policy of “average inflation targeting,” allowing inflation to run “moderately above 2%” for some period of time. This means the Fed will be less inclined to hike interest rates when the unemployment rate falls, CNBC noted. Powell said:
Many find it counterintuitive that the Fed would want to push up inflation. However, inflation that is persistently too low can pose serious risks to the economy.