Bitcoin Stumbles as Investors Fear Fed Chair Powell Is Slow to React on Rate Cuts
The Federal Reserve anticipates that President Trump's tariffs will increase inflation, but the impact on monetary policy remains uncertain. Chair Jerome Powell highlighted the unexpected magnitude of tariff increases and their potential economic effects, suggesting a conflict with the Fed's dual mandate. Bitcoin's price fell by 1.5% during Powell's speech, while the S&P 500 dropped 2% midday. Analysts express concern that the Fed may be perceived as lagging behind economic conditions. Powell acknowledged a positive growth outlook despite a slowdown and indicated that tariffs are likely to cause a temporary rise in inflation. Following recent tariff reductions, recession odds have decreased, but uncertainties about trade with China persist. Fed policymakers had anticipated two rate cuts this year, but futures traders now expect four cuts by 2025. Powell noted the growing mainstream acceptance of cryptocurrencies and suggested stablecoins could be beneficial, emphasizing consumer protections. Tariffs may disrupt global trade and challenge the US dollar's reserve currency status.
