Bitcoin News Alert: Jerome Powell Dashes Hopes for Rate Cuts as Tariff Inflation Soars
In a move that sent shockwaves through the cryptocurrency market, Federal Reserve Chair Jerome Powell has signaled no near-term rate cuts, citing rising tariff inflation. This Bitcoin news comes as investors grapple with heightened market volatility and shifting expectations.
How Jerome Powell’s Stance Impacts Bitcoin
Powell’s hawkish remarks during the recent FOMC meeting have significantly altered market dynamics:
- The probability of a September rate cut dropped from 63.7% to 47.1%
- Bitcoin fell below $116,000 as risk sentiment soured
- $0.2 billion in crypto liquidations occurred shortly after the announcement
Understanding the Inflation Data Behind the Decision
Key inflation metrics that influenced Powell’s stance:
| Metric | Value | Expectation |
|---|---|---|
| Core PCE | 2.8% | Below forecast |
| Overall PCE | 2.6% | Above forecast |
What This Means for Cryptocurrency Investors
The Fed’s commitment to data-driven decisions creates uncertainty for digital assets:
- Bitcoin’s sensitivity to macro signals exceeds traditional assets
- October and December meetings now in focus for potential policy shifts
- Employment data and PCE releases will be critical indicators
Market Reactions to Powell’s Announcement
The immediate aftermath saw significant movements:
- S&P 500 erased gains and turned negative
- Crypto market experienced sharp liquidations
- Analysts note Bitcoin’s volatility as a sentiment barometer
Navigating the Uncertain Crypto Landscape
With the Fed adopting a wait-and-see approach, cryptocurrency investors should:
- Monitor upcoming economic data releases closely
- Prepare for continued volatility
- Diversify portfolios to mitigate risk
FAQs
Q: Why did Bitcoin drop after Powell’s announcement?
A: Bitcoin fell as investors reacted to the prospect of prolonged higher interest rates, which typically reduce risk appetite.
Q: When might the Fed consider rate cuts?
A: Current market pricing suggests October or December as possible windows, but this depends on inflation data.
Q: How do tariffs affect cryptocurrency markets?
A: Tariffs can increase inflationary pressures, prompting tighter monetary policy that impacts risk assets like Bitcoin.
Q: What should crypto investors watch next?
A: Key indicators include upcoming PCE data, employment figures, and Fed meeting minutes.
