Bitcoin, altcoins could come under pressure after the Federal Reserve chairman Jerome Powell warned that Trump’s tariffs will likely lead to higher inflation and slower growth for the U.S. economy.
“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said Friday.
High inflation and high unemployment can create stagflation, which is difficult to manage because actions to fix one issue—like cutting interest rates to boost growth—can worsen another, such as inflation, and vice versa.
Powell warned that he was not in a hurry to cut interest rates, since inflation remained high. His statement mirrored that of other officials like Raphael Bostic and Adriana Kugler, who have supported higher rates for longer to combat inflation.
Trump, however, disagrees.
“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates,” Trump wrote on his social media platform, accusing Powell of “playing politics.”