In a speech delivered at Spelman College in Atlanta, U.S. Federal Reserve Chair Jerome Powell struck a mixed tone on inflation and the American economy, leading to an upward tick in Bitcoin (BTC) and the broader crypto markets on Friday.

Powell acknowledged that inflation stemmed from a combination of strong demand and pandemic-induced supply constraints. He highlighted the role of the normalization of supply and demand conditions, as well as the tightening of monetary policy and overall financial conditions over the past two years, which have contributed to disinflation.

The Federal Reserve's aggressive actions have pushed the policy rate into restrictive territory, exerting downward pressure on economic activity and inflation. Powell emphasized that the full effects of the tightening measures may not have been fully felt yet, given the lag in monetary policy's impact on economic conditions. He also stressed that the forcefulness of the Fed's response to inflation has helped maintain its hard-won credibility, anchoring the public's expectations of future inflation.

Despite acknowledging the uncertain economic impacts of the ongoing pandemic, Powell stated that the Federal Open Market Committee (FOMC) is committed to achieving 2% inflation over time. He noted that growth in spending and output is expected to slow as the effects of the pandemic and reopening diminish and restrictive monetary policy weighs on aggregate demand. Powell conveyed that the FOMC will continue to maintain a restrictive stance until they are confident about inflation reaching its target, and further tightening measures may be implemented if necessary.

The market's response to Powell's speech was positive, with Bitcoin trading at $38,728, a nearly 3% increase in the past 24 hours. The broader crypto market also experienced an uptick, with the total market cap rising by around 2% in the same period, according to CoinGecko.

As Fed Chair Jerome Powell's comments provided a nuanced view on inflation and the American economy, investors in the crypto market responded with cautious optimism. With ongoing uncertainty and the Federal Reserve's commitment to a tight monetary policy, the future trajectory of both inflation and the crypto markets remains to be seen.