Chairman of the American Federal Reserve, Jerome Powell, believes that capital markets are a ‘bit frothy’, thanks in part to the recent hype around Dogecoin. Powell asked in a conference with the press on Wednesday whether he thought that there was a risk to the general stability of finances in the current trends. Dogecoin which started out as a joke is now 6000% more valuable than it was this time last year.
Powell said, “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 also it has a tremendous amount to do with vaccination and reopening of the economy.”
In an attempt to bounce back against COVID, central banks everywhere have been consist with pumping new currency into financial markets, which has bled into the cryptocurrency market as well.
Powell was optimistic about the future of America’s economy, saying that there was low funding risk among financial institutions.
“What has been moving markets a lot in the last few months is this turn away from what was a pretty dark winter to now a much faster vaccination process and a faster reopening.”