#PowellRemarks
Key Points from Powell’s Speech
Wait-and-See Approach: The Fed will not adjust interest rates until there is greater clarity on the economy’s direction, maintaining its current target range of 4.25% to 4.5%. Powell emphasized the low cost of waiting given the economy’s solid backdrop.
Tariff Impact on Inflation and Growth: Trump’s tariffs are expected to increase inflation and slow economic growth, potentially moving the Fed further from its dual mandate goals of 2% inflation and maximum employment. Powell noted that progress toward the 2% inflation target has slowed.
Economic Outlook: The U.S. economy is still solid, with a balanced labor market, but growth has slowed in Q1 2025, and consumer spending has moderated. Inflation remains above the 2% target, posing a challenge.
No “Fed Put” for Markets: Powell explicitly stated there is no automatic Fed intervention to rescue falling markets, countering expectations of immediate rate cuts to stabilize financial markets.
Challenges of Tariff-Driven Stagflation: Powell highlighted the risk of stagflation—higher inflation coupled with slower growth or higher unemployment—describing it as a “difficult” scenario for the Fed to navigate.
Fed Independence: Powell reaffirmed the Fed’s commitment to making decisions based on economic data, not political pressures, amidst Trump’s criticisms and calls for rate cuts.
Market Functioning: Despite volatility, Powell noted that bond and stock markets are functioning orderly, adapting to the new policy landscape as expected.
Question
What impact did Jerome Powell’s speech on April 16, 2025, have on Bitcoin’s price stability at $84,633.86?