Bitcoin jumped 5.3% to nearly $59,550 as Federal Reserve Chairman Jerome Powell got nominated for a second term. The nomination next heads to the Senate for confirmation.

Powell guided the US central bank and the nation’s economy through the Covid-19 pandemic by implementing unprecedented monetary stimulus.

President Joe Biden announced Monday following speculation that Governor Lael Brainard might get the spot who will instead be a vice-chair of the board of governors. Biden said in a statement,

“As I’ve said before, we can’t just return to where we were before the pandemic, we need to build our economy back better, and I’m confident that Chair Powell and Dr. Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before.”

Biden also praised the Fed for its “decisive” actions in the early days of the pandemic, which included $120 million monthly bond purchases, cutting interest rates to near zero, and an array of lending programs.

Now markets are watching closely the pace the Fed will unwind its massive policy support as officials have already said they will start tapering bond purchases that could conclude in late spring or early summer 2022 in response to rising inflation. Interest rate hikes would come after that.

According to Morgan Stanley economists, the Fed will wait until 1Q23 to make its first interest rate hike despite their projection that US unemployment will fall to 3.6% by the end-2022.

Falling core PCE inflation and rising labor force participation are two drivers for no hikes in 2022, as per the bank’s economists. According to them, central banks may ultimately prove dovish, which may not be immediately apparent, “an uncertain dynamic that could push yields and USD higher.”

Dovish and Fed is positive for Bitcoin, and so is lower yields as negative real yields (inflation-adjusted) present a challenge for long-term asset allocators which may look to diversify into riskier assets as we saw with Houston Firefighters’ Relief and Retirement Fund becoming the first U.S. public pension plan to invest directly in Bitcoin and Ether.

“In crypto, euphoria can be appreciated in the funding rates. This is somewhat similar to credit spreads in traditional finance. If funding is not very high, there is no unsustainable euphoria,” noted trader and economist Alex Kruger.