Crypto friends! The Federal Reserve is stirring things up again. Powell directly took a hawkish stance this time, pouring cold water on the expectations of a September rate cut. The big bearish candlestick early this morning is the best proof. The crypto market, as the 'barometer' of global risk assets, does not view this action favorably. Below, I will use the most down-to-earth language to break down the insider news of this meeting, Powell's tough statements, and their potential impact on our crypto market.

Powell's speech: Hawkish stance.

Let's first talk about the core of this Federal Reserve meeting. You might already know the results of the meeting—interest rates remained unchanged, still at 4.25% to 4.5%, marking the fifth consecutive pause in rate cuts. But the bigger news is that there was a big disagreement within the meeting! Two Federal Reserve bigwigs (Governor Waller and Bowman) directly voted against, calling for a 25 basis point cut, which hasn't happened since 1993.

Powell directly fired back at the press conference: It's too early to assert a rate cut in September. The labor market is 'stable,' and inflation is still above the target. Traders immediately exploded, interpreting it as 'no chance for a rate cut.' The US stock market immediately tanked, with the S&P 500 down 0.1%, and the bond market followed suit. The crypto market was hit hard, starting a big bearish candlestick. Powell also added that economic uncertainty is relatively high, and growth in the first half was only 'moderate.' This tone is definitely hawkish! In short, the Federal Reserve is now more concerned about inflation and employment data. Rate cut? Let's hold off for now, brother.

September rate cut expectations weakened.

Friends, the expectation of a September rate cut is now basically half-cool.

Powell directly 'cooled down' the market: He emphasized that the data (such as core PCE inflation and July non-farm payrolls) must be watched in the coming months before deciding on policy. Powell's actions caused a significant drop in probabilities—traders are now in wait-and-see mode. Why such a big impact? Because he downplayed expectations, which is like giving the dollar a shot of adrenaline. A stronger dollar usually means significant pressure on risk assets (including our Bitcoin and altcoins). Think about it, with interest rate cut expectations weakened, funds may flow back from high-volatility assets to safe havens, reducing liquidity.

Rate cut expectations weakened, but the crypto market was unaffected.

This morning, as soon as Powell's hawkish comments came out, BTC and ETH started a waterfall performance. I felt like a thousand grass mud horses were flying by in my mind. Evil Powell, what will happen if you just hold off for a moment? You have to make hawkish statements. BTC briefly dipped to 115,800, ETH dipped to 3,680, with huge short-term volatility. Brothers with long positions are suffering again; waking up this morning, I found the price unchanged, but my positions are gone.

Powell's actions significantly weakened the expectation of a rate cut in September, but strangely, BTC and ETH only took a dip. The morning's trend has already returned to health and has not been greatly affected. Institutions, regardless of whether you cut rates or impose tariffs, are just buying, buying, buying. BTC has returned above 118,500, and ETH is back above 3,850, even looking to challenge previous highs, undoubtedly giving the market strong confidence.

In the past, each hawkish statement led to several days of continuous decline in the market. This time, however, the same script did not play out; the market remained resilient, and the trend remained good. This also indirectly indicates the attitude of institutions, which provides significant motivation for the subsequent market. Tomorrow is the non-farm payrolls release date, and the current expectations are relatively good. The probability of a sharp decline in the short term is not high, and the market still has upward expectations.

Summary

This meeting lowered the expectations for a September rate cut, but the market was not significantly affected, proving the strong purchasing determination of institutions. This incentivizes stronger buying momentum in the market, and the upward trend has not changed. Stay confident, hold onto your valuable coins, and the future looks promising!