On June 18, 2025, Federal Reserve Chair Jerome Powell confirmed the need to maintain current interest rates while indicating potential inflation risks due to tariffs.
Fed's Caution Regarding Inflation
At the Federal Open Market Committee (FOMC) meeting, Jerome Powell stated that U.S. inflation may rise in the coming months due to tariffs imposed by the Trump administration. He emphasized the need for sufficient confidence in inflation reduction before considering interest rate cuts. The Fed's projections indicate two potential rate cuts in 2025, aligning with their current "moderately restrictive" policy. This increased uncertainty affects risk assets, including cryptocurrencies.
Crypto Markets React to Fed Actions
In response to the Fed's decision, cryptocurrency prices remain under pressure. Currently, Bitcoin (BTC) is priced at $104,746.34 with a market cap of $2.08 trillion. The 24-hour price change is minimal at 0.05%, while the seven-day figure shows a decline of 3.62%. BTC's 24-hour trading volume has dropped by 17.38% to $47.44 billion, indicating decreased activity among investors amid uncertainty.
Future Implications and Investor Strategies
The Fed's focus on inflation and tariffs may have implications for global risk assets, prompting investors to adjust their strategies. Historical trends suggest that during periods of high uncertainty, investors tend to seek stability in both traditional and crypto markets.
The Federal Reserve continues to exercise caution amid inflation risks, which may influence investor approaches in the face of economic uncertainty.
