Jerome Powell’s latest comments on inflation rattled markets on Wednesday, as the Fed Chair warned of rising price pressures linked to newly enacted Trump tariffs.
While interest rates were held steady, Powell’s tone was notably hawkish — and investors took notice.
Calling this the “early phase” of tariff-induced inflation, Powell signaled that further price increases are likely in the coming months. He also acknowledged the Fed hasn’t yet decided on a September rate cut, citing uncertainty and the need for more data.
The crypto market reacted quickly. Bitcoin briefly slipped to $116,000 following Powell’s remarks but rebounded above $117,000 shortly after. The move highlighted the asset’s sensitivity to macroeconomic signals and policy direction.
Rate cut expectations also took a hit. Data from CME FedWatch shows the odds of a September cut dropped from 63.7% to 47.1%, as investors recalibrate their forecasts. October and December outlooks remain mixed, with rising uncertainty clouding the policy path forward.
All eyes now shift to the upcoming PCE inflation report — the Fed’s preferred price metric — due tomorrow. A cooler-than-expected reading could ease pressure on the central bank and offer support for both traditional and crypto markets.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/feds-inflation-warning-shakes-markets-as-bitcoin-dips-then-recovers/