News and Commentary
#PowellRemarks Federal Reserve Chairman Jerome Powell delivered his speech yesterday (June 18, 2025) following the Federal Open Market Committee meeting, reaffirming adherence to a 'wait-and-see' approach to maintain the central bank's independence in the face of political pressures, while committing to achieving the goals of 'maximum employment' and price stability for the benefit of American households and businesses.
In this context, the following key messages emerged:
Stability of interest rates and waiting for data
Powell emphasized that there is no specific timeline for reducing interest rates, considering that moving forward depends on the path of inflation and the labor market. This stance increased uncertainty risks for investors and forced them to monitor every new economic reading for signs of a near change.
Focus on data quality
He warned against any decline in the ability of statistical institutions to collect and publish data accurately, explaining that the weakness of this system could lead to incorrect decisions regarding monetary policy. He stated that economic data is a public good essential for the functioning of the Federal Reserve.
Concern over tariff inflation
He pointed out that raising tariffs causes cost pressures to be passed on to consumers, and may create a temporary peak in inflation, emphasizing the need to stabilize long-term expectations at 2%.
Divergent expectations within the committee
He clarified that committee members agreed on the possibility of two rate cuts during the next year, but the gap between those who see a full delay and those who support a faster move reflects fears of a 'stagflation' scenario.
The impact of this on digital markets and stocks
Despite the speech's focus on traditional indicators, its impact quickly overshadowed the cryptocurrency sector and related stocks (Crypto Stocks):
Bitcoin experienced some slight decline, as traders appeared wary of the ongoing uncertainty's impact on borrowing costs and the regulatory environment.
Coinbase's stock dropped by 4-5% after the speech, as several investors preferred to wait to see the fate of interest rate policy rather than engage in high-risk assets.
- What every trader should do: Monitor inflation and labor market data:
Rely on updates from the Consumer Price Index and monthly job reports to anticipate the next steps of the central bank.
Maintain safety margins:
Use stop-loss orders to avoid excessive exposure in case of sudden decisions.
Portfolio diversification:
Diversify your investments between traditional and digital assets to mitigate the impact of Federal decisions on portfolio balance.
Stay informed on regulatory matters:
Monitor new legislative developments regarding stablecoins and securities markets, as they may interact directly with interest rate policy
