Minneapolis Federal Reserve President Neel Kashkari on Tuesday had some harsh words for the nascent crypto asset market.
The central banker said he doesn’t see any use case for bitcoin
the world’s No. 1 crypto, and referred to the broader digital-asset sector as one that is largely tied to fraud and hype.
“Cryptocurrency is 95% fraud, hype, noise and confusion,” Kashkari said, speaking at the Pacific Northwest Economic Regional Annual Summit in Big Sky, Mont.
Bitcoin prices were at $44,993, down 2.4% on CoinDesk on Tuesday. Meanwhile, Ether
on the Ethereum blockchain was changing hands at $3,069, off 3%, while meme coin dogecoin
was trading at around 30 cents, down 5.1%.
Crypto has gained traction among institutional investors in 2021 but is still viewed as a speculative and highly risky trade compared with traditional markets.
Kashkari also offered some of his views on monetary policy plans, noting that he still sees a “a lot of slack” in the U.S. labor market, and suggesting that he might need a couple of more strong jobs reports before he is inclined to support a push to scale back the central bank’s monthly purchases of $120 billion in Treasurys and mortgage-backed securities.
The Minneapolis Fed president’s comments come amid growing talk about the timing of pulling back the Fed’s COVID-era accommodations and eventually raising interest rates as the economy attempts a recovery from the pandemic.
On Tuesday, the Dow Jones Industrial Average
and the S&P 500 index
snapped five-session win streaks, with some blaming the day’s declines at least partly on growing concerns about a rollback of easy-money policies.
For his part, Kashkari said that it would be reasonable to start reducing bond-buying by the end of 2021, if the job market cooperates.
In July, the U.S. created a robust 943,000 jobs, in what some viewed as a sign that the economic recovery was gaining some steam, despite the latest assault from the delta variant of COVID-19.