Fed Maintains Rates Amid Tariff-Induced Inflation Concerns – Coincu

Jerome Powell, Chair of the Federal Reserve, signaled caution on June 18, 2025, regarding tariff-induced inflation, maintaining current interest rates in Washington, D.C.

Continuing uncertainty over trade impacts delays monetary easing, as Powell prioritizes the 2% inflation target influencing financial and crypto markets.

Tariffs Drive Fed’s Cautious Stance on Rate Adjustments

Fed Chairman Jerome Powell stated at the Federal Open Market Committee (FOMC) meeting that U.S. inflation might increase in the coming months due to tariffs from the Trump administration. Powell emphasized the need for enough confidence in inflation reduction before considering interest rate cuts. The Fed’s “dot plot” indicates two potential rate cuts in 2025, aligning with their current “moderately restrictive” policy.

These circumstances have elevated uncertainty, affecting risk assets, including cryptocurrencies like Bitcoin and Ethereum. The markets are attentive to Powell’s indications and the broader Federal Reserve strategy, as ongoing economic uncertainty impacts monetary decisions.

“Despite elevated uncertainty, the economy is in a solid position. The unemployment rate remains low and the labor market is at or near maximum employment. Inflation has come down a great deal but has been running somewhat above our 2% longer run objective… The Federal Open Market Committee decided to leave our policy interest rate unchanged.” — Jerome Powell, Chairman, Federal Reserve

Crypto Markets React to Fed’s Inflation Projections

Did you know? In similar past scenarios, when the Fed delayed interest rate cuts amid tariff concerns, risk assets including Bitcoin often recorded heightened volatility, analogous to increased investor cautiousness during 2018-2019 trade tensions.

Bitcoin (BTC) is currently priced at $104,746.34 with a market cap of $2.08 trillion, according to CoinMarketCap. Despite a minimal 0.05% 24-hour price movement, the seven-day figure shows a decline of 3.62%. BTC’s 24-hour trading volume experienced a drop of 17.38% to $47.44 billion, highlighting market uncertainty.

According to Coincu research team, the Fed’s focus on tariffs and inflation signals potential implications on global risk assets, pushing investors to adjust their strategies. Historical trends could lead stakeholders to seek stability in traditional and crypto markets during economically volatile periods.