#PowellRemarks Federal Reserve Chairman Jerome Powell delivered his speech yesterday (June 18, 2025) following the Open Market Committee meeting, emphasizing the adherence to a 'wait-and-see' approach to maintain the central bank's independence in the face of political pressures, while committing to achieving the goals of 'maximum employment' and price stability for the benefit of American families and businesses.
In this context, the following key messages emerged:
Stability of interest rates and waiting for data
Powell emphasized that there is no specific timeline for interest rate cuts, considering that moving forward depends on the path of inflation and the labor market. This stance has heightened risks of uncertainty for investors, forcing them to monitor every new economic reading for signs of imminent change.
Focus on data quality
He warned against any decline in the ability of statistical institutions to collect and publish data accurately, explaining that a weakness in this system could lead to incorrect decisions regarding monetary policy. He stated that economic data is a 'public good' essential for the Federal Reserve's operations.
Concern over tariff inflation
He pointed out that raising tariffs causes cost pressures to be passed on to consumers, which may create a temporary peak in inflation, stressing the need to anchor long-term expectations at 2%.
Divergent expectations within the committee
He clarified that committee members agreed on the possibility of two rate cuts during the next year, but the gap between those who foresee a complete delay and those who support a faster move reflects fears of a 'stagflation' scenario.
Its reflection on digital markets and stocks
Despite the speech's focus on traditional indicators, its impact quickly cast a shadow over the cryptocurrency sector and related stocks (Crypto Stocks):
Bitcoin experienced a slight decline, as traders appeared fearful of the ongoing uncertainty's impact on borrowing costs and the regulatory environment.
Coinbase shares fell by 4-5% after the speech, as several investors preferred to wait to see the fate of interest rate policy rather than engage in high-risk assets.
- What every trader should do: Monitor inflation and labor market data:
Rely on updates from the Consumer Price Index and monthly job reports to anticipate the central bank's next steps.
