According to a recent statement by Federal Reserve Chairman Jerome Powell, this year's increase in tariffs could pressure economic activity and lead to inflation.
Powell's Warnings: Economic Growth at Risk
Jerome Powell raised concerns that increased tariffs could negatively impact the U.S. economy. He highlighted that this could lead to higher consumer prices and reduced corporate profits, potentially slowing economic growth. Institutional investors might start shifting towards safer assets like U.S. Treasuries, moving away from equities and cryptocurrencies.
Bitcoin Volatility Amid Inflation Concerns
Historically, tariff hikes such as those in 2018-2019 led to Bitcoin volatility, which may repeat under current economic pressures. Bitcoin is currently trading at $104,503.82 with a market cap of $2.08 trillion. Although it shows a 0.42% increase over the past 24 hours, there has been a 3.98% decline over the last week.
Market Analysis and Forecasts
The Coincu research team notes that potential inflationary shocks could lead to further market volatility. As cryptocurrencies respond to macroeconomic changes, historical events indicate that inflation concerns often lead to swift market corrections, with investors favoring safer assets. "Macro policy is the single most important driver for digital asset flows and risk sentiment," stated Raoul Pal, CEO of Real Vision.
Powell's conclusions emphasize the importance of monitoring economic factors such as inflation and tariffs that can impact financial markets, including the cryptocurrency market.
