Federal Reserve Chair Jerome Powell sent shockwaves through markets Wednesday, warning that Trump’s tariffs are just starting to fuel inflation. The hawkish comments triggered a Bitcoin price drop from $117,500 to under $116,000 before a partial recovery.
Key Takeaways From Powell’s Speech
🔴 “Early days” of tariff inflation – Consumer prices already rising
🔴 September rate cut unlikely – Fed wants “more clarity” first
🔴 Data-dependent approach – PCE report tomorrow critical
Market Reactions
📉 Bitcoin dipped 1.3% before rebounding to $117K
📉 Rate cut odds fell (Sept chance dropped from 64% to 47%)
📊 All eyes on PCE data (Fed’s preferred inflation gauge)
Why This Matters for Crypto
- Higher inflation → longer high rates → risk asset pressure
- Fed uncertainty → market volatility spikes
- $117K BTC key level – Break below could test $112K support
Powell’s tone marked a clear hawkish shift, emphasizing:
“We have to think of this as still being in the quite early days… It will be difficult to determine if the data will be clear by September.”