Cutting rates or not didn’t change anythingPowell’s mood is what moves the crypto market
I researched his every word: Here is how it will affect the crypto🧵👇
1/➱ Many were waiting to see if the Fed would cut rates - thinking that would decide whether markets pump or dump
🕷 But the real signal was Powell’s stance on the state of the economy, not the rate itself
2/➱ The Fed kept rates unchanged - no surprise, that was priced in with 95% probability
🕷 But markets don’t move on facts. They move on expectations.
🕷 I researched everything he said and here's how it will affect the market.
3/➱ Inflation has declined overall, but Powell said risks remain “elevated.”
🕷 He specifically mentioned tariffs as a new inflationary driver - especially short-term expectations
🕷 That’s a shift from prior messaging where inflation risks were seen as subsiding
4/➱ Powell warned that persistent tariffs could push up both inflation and unemployment
🕷 That’s classic stagflation risk - and it ties the Fed’s hands
🕷 They can’t cut rates if inflation accelerates, even if growth slows
5/➱ He even said rate cuts may be delayed until 2026 if inflation picks up again
🕷 That line alone crushed hopes of an imminent pivot
🕷 It's the clearest sign yet the Fed won’t rush to ease - and may tolerate tighter policy longer than the market expects
6/➱ Trump has been pressuring the Fed to cut. Powell dismissed that entirely.
🕷 He emphasized the Fed is independent and won’t be swayed by political noise
🕷 But that only adds to the tension: Trump’s tariffs + no cuts = tighter financial conditions
7/➱ Despite all this, Powell said the economy remains “stable and functioning efficiently.”
🕷 So no immediate recession fears - but also no urgency to cut rates
🕷 This neutral tone leaves markets stuck in a data-watching limbo
8/➱ He did say rate cuts are still “likely” in 2025 - if inflation allows it
🕷 But that’s a big “if.” With sticky CPI and new tariffs, the odds of easing are shrinking
🕷 The Fed is in wait-and-see mode - and the window for cuts is narrowing
9/➱ QT is slowing down. Treasury buybacks have quietly started.
🕷 These are early signs of a pivot - but not full-blown easing
🕷 Markets wanted confirmation of a dovish shift. Powell didn’t give it.
9/➱ QT is slowing down. Treasury buybacks have quietly started.
🕷 These are early signs of a pivot - but not full-blown easing
🕷 Markets wanted confirmation of a dovish shift. Powell didn’t give it.
10/➱ Liquidity is still king
🕷 Without fresh liquidity injections or a dovish pivot, rallies are hard to sustain
🕷 Powell’s tone yesterday suggests risk assets may face pressure in the short term - especially if macro data deteriorates and inflation stays sticky
11/➱ The key takeaway:
- Powell didn’t break anything - but he didn’t help either
- No rate cuts, cautious tone, inflation still a threat
- Markets will stay choppy until the Fed gives a clearer pivot signal
🕷 The next big move? It’s all about expectations.
12/➱ Final thought:
🕷 Don’t trade headlines. Trade expectations.
🕷 Powell’s tone was more hawkish than many hoped
🕷 If tariffs persist and inflation stays sticky, the Fed may keep its foot on the brake longer than the market thinks
🕷 Always invest only what you can afford to lose
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