On Tuesday, June 24, Federal Reserve Chairman Jerome Powell appeared before Congress, facing pressure from a Republican majority eager to support Donald Trump’s push for immediate interest rate cuts. Despite this, Powell stood firm — waiting remains the key message.
But what exactly is he waiting for? And how could this impact Bitcoin, cryptocurrencies, and the broader financial market?
Trump Demands Action, Powell Slams the Brakes
Trump and his allies argue that interest rates are too high, pointing to the European Central Bank’s recent and more aggressive rate cuts as a model. Lower rates, in their view, would:
Stimulate investments
Ease national debt refinancing
Create a favorable environment for economic growth
The Fed, however, sees things differently. With inflation still above its 2% target and a strong labor market, it believes cutting rates now could reignite inflationary pressure. Unlike politicians with short-term mandates, the Fed focuses on long-term economic stability.
How Does This Affect Crypto?
Traditionally, lower interest rates mean more liquidity in the market — which benefits risk assets like Bitcoin and altcoins. That’s why many crypto investors are eagerly anticipating a rate cut.
However, recent history shows Bitcoin doesn’t necessarily need loose monetary policy to grow. Despite high interest rates, Bitcoin has rallied significantly, indicating that crypto markets often follow their own logic.
Tariffs: The New Source of Uncertainty
Powell also cited additional uncertainty stemming from Trump’s proposed tariffs. Details remain unclear:
How high will they be?
Which products will they affect?
How long will they stay in place?
This makes it extremely difficult to assess their economic impact, especially on prices. For that reason, Powell believes it's too soon to shift policy — though critics argue this wait-and-see approach risks missing the opportunity for a “soft landing.”
Political Tensions at Play?
There’s growing speculation that persistent attacks from Trump and figures like Senator J.D. Vance may be having the opposite effect — strengthening Powell’s resolve to uphold the Fed’s independence. Whether intentional or not, it’s a power struggle playing out in real time.
What About the July 30 Fed Meeting?
Chances of a rate cut appear slim. Markets currently price in just over 20% probability of a cut, which is likely too optimistic.
The Fed’s latest projections suggest inflation could rebound later this year — especially if tariffs are introduced — giving the central bank even more reason to hold rates steady.
An important inflation metric, the PCE index, is due Friday. While a slight decline is expected, it probably won’t be enough to justify a rate cut in July.
Is This a Problem for Bitcoin?
Not necessarily. Bitcoin has shown it can thrive even in high-rate environments. While lower rates and increased liquidity may help, they’re not essential for crypto growth.
Even if we get small cuts (25–50 basis points), they’re unlikely to dramatically shift market dynamics. The major easing cycle many dream of may not arrive until 2026 or 2027 — and that’s not necessarily a bad thing.
How to Approach This Market Phase
Unless new geopolitical shocks emerge, major volatility isn’t expected in the near term. At the time of writing, Bitcoin is attempting to break above $107,000, with most of the crypto market showing modest gains — though trading volume remains low.
All eyes will be on the U.S. market opening at 3:30 PM (CET), a key moment that could influence the day's momentum.
Meanwhile, institutional players continue accumulating Bitcoin — a sign that they see long-term value beyond short-term liquidity cycles. Interestingly, retail investors still seem largely absent, highlighting a growing gap between large-scale and small-scale market behavior.
A Green Light for Crypto Banks
One of the most important takeaways: Powell reaffirmed that banks can offer crypto services without any regulatory issues. This marks a major shift from the previous administration, where banks involved with crypto often faced threats and pressure from regulators.
Conclusion
While markets are eager for rate cuts, the Fed’s current stance is unlikely to change soon — and that’s okay. The crypto sector is increasingly building its own momentum, supported by institutional interest and growing regulatory clarity.
If this trend continues, Bitcoin and other cryptocurrencies may not just survive — they could thrive, even without immediate monetary easing.