Bitcoin Little-Changed Above $57K as Fed Chair Powell Testifies to Congress

• The Fed Chair acknowledged a softer labor market has gotten his attention, but reminded that inflation remains too high.
• Bitcoin bounced higher, but quickly gave back any gains.

The chances of a September rate cut edged just so slightly higher on Tuesday as U.S. Federal Reserve Chairman Jerome Powell said elevated inflation is not the only risk faced by the economy.

"Reducing policy restraint too late or too little could unduly weaken economic activity and employment," said Powell in prepared remarks for his Humphrey-Hawkins testimony in front of a Senate committee. In the question and answer session that followed, Powell furthered those thoughts, saying the latest data show "considerable cooling" in the labor market and that the Fed is "very much aware" of downside risks.

The price of bitcoin {{BTC}} received the briefest of knee-jerk bounces on the Powell testimony, but quickly gave back any gains and was trading just above $57,000 at press time, modestly higher over the past 24 hours.

A check of traditional markets finds the major U.S. stock indexes roughly flat and the dollar and bond yields slightly higher.

Any hint of dovishness by the Fed chair was balanced out by his continued focus on inflation. "We do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent," he told the committee.

According to CME FedWatch, the odds of one or more rate cuts at the Fed's September are now at about 75% – that's up only a hair from 24 hours ago, but up from 50% one month ago.

Still to come on Thursday is the latest read on inflation with the government's June Consumer Price Index (CPI) report expected to show prices rising 0.1% last month and core prices (excluding food and energy) rising 0.2%. On an annual pace, headline inflation is seen coming in at 3.1% and the core rate 3.4%. A surprise in either direction is likely to quickly change those September rate cut odds.