![It Is Right To Reduce Stimulus, Bullard agrees; Bitcoin Unmoved](http://bitcoinworld.co.in/wp-content/uploads/2021/07/It-Is-Right-To-Reduce-Stimulus-Bullard-agrees-Bitcoin-Unmoved-1.jpg)
According to the Federal Reserve Bank of St. Louis President James Bullard, the US economy is ready for a gradual unwinding. They are reducing the central bank’s liquidity-boosting asset purchase programme, which began a year ago.
The Interview With WSJ
In an interview with the Wall Street Journal on Monday, Bullard said that further purchases risk overheating the housing market.
“Bullard said in an interview with the Wall Street Journal (WSJ) on Monday that further purchases risk overheating the housing market. I am a little bit concerned that we’re feeding into an incipient housing bubble.”
Covid Plummets Markets
Since March 2020, when financial markets plummeted due to worries of a coronavirus-induced recession, since then, the Fed has been buying bonds worth $120 billion each month. The extraordinary monetary stimulus sparked risk-taking across the entire financial market, including bitcoin. From October 2020 to April 2021, the most popular cryptocurrency had a six-fold increase to over $60,000.
Feds Shocking The Market
Last month, the Fed shocked investors by announcing that the first interest rate hike would be delayed until 2023. The central bank has stated that the current increase in inflation may be temporary. However, the analysts polled by the Wall Street Journal anticipate prices to remain high for some time.
Cost of Living Increases
Tuesday will see the June consumer price index (CPI) report in the United States. According to FXStreet, the report is likely to reveal that the cost of living increased 4.9% year over year in June, following a 5% increase in May. A significant deviation from forecasts may exacerbate taper concerns, placing downward pressure on liquidity-dependent financial markets.
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