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Powell Holds Steady as Fed Navigates Inflation Risks, Trade Uncertainty

In his June 18 press conference, Federal Reserve Chair Jerome Powell emphasized a cautious, data-driven approach as the Fed left interest rates unchanged at 4.25%–4.50%. He noted that while inflation has eased significantly since its 2022 peak, it remains above the 2% target, with near-term expectations rising due to escalating tariffs. Powell acknowledged that tariff-driven price pressures could be short-lived—but warned they could become persistent if expectations de-anchor.

GDP growth has slowed, partly due to front-loaded imports ahead of potential tariff hikes. Labor market conditions remain solid, with 4.2% unemployment and steady job growth, but consumer and business sentiment is weakening amid policy uncertainty.

For markets—especially crypto—the Fed’s steady hand signals both relief and restraint. Bitcoin and altcoins initially held gains, pricing in no near-term rate cuts. However, Powell’s remarks on elevated inflation and the possibility of longer-term price impacts from tariffs may limit upside momentum in risk assets. The Fed’s updated projections suggest only modest rate cuts by 2026, reinforcing a higher-for-longer policy stance. As monetary policy remains tight and global trade conditions uncertain, crypto markets are likely to experience intermittent volatility, with clear rate guidance becoming a key catalyst for future moves.