Federal Reserve Chairman Jerome Powell is set to testify before Congress and the Senate, and the market is holding its breath. With Bitcoin dropping to $98,500 and altcoins struggling, cryptocurrency investors are looking for clues about rate cuts, inflation risks, and what’s next for the economy.
This comes at a critical moment, as Powell faces intense political pressure and global tensions flare. The financial world wants quick answers.
Under pressure: Trump, Warren, and Fed officials push for cuts
Powell is facing pressure from both sides after the Fed decided to keep interest rates at 4.25%–4.5% in June. President Donald Trump criticized the Fed's cautious stance, calling it a mistake and demanding a deep rate cut of 2–3%.
Senator Elizabeth Warren and Fed Governor Michelle Bowman and Christopher Waller are also calling for an earlier cut, possibly as soon as July.
According to CME FedWatch data, the likelihood of a rate cut in July is 23%, while the likelihood of a rate cut in September is much higher at 82%. Powell's testimony is expected to address why the Fed remains hesitant despite the increasing demand.
Cryptocurrency is affected as tariff talks scare investors
The cryptocurrency market is in a difficult state. Bitcoin has dropped to its lowest level in months and altcoins are deep in the red. Much of this stems from concerns about the trade tariffs proposed by Trump, which have added to the instability of an already fragile economy.
Powell is expected to discuss how these tax levels could impact the Fed's decision. If he leans towards easing interest rates, cryptocurrency prices could rebound. But if he maintains a cautious stance, the U.S. dollar could strengthen, and that usually means more pain for digital assets.
Tensions in the Middle East raise concerns about inflation
Recent U.S. airstrikes on Iran have pushed oil and gold prices higher, raising new concerns about inflation. Ongoing conflict between Israel and Iran also increases the risk of closing the Strait of Hormuz, a vital global shipping route.
If that happens, fuel prices could spike, making it difficult for the Fed to achieve its inflation target. Powell's comments on these risks will be closely monitored, as they could shape expectations for interest rate policy throughout the rest of 2025.
Powell's testimony could change the market
Powell's upcoming statements could be a turning point. Investors want to know – will he signal easing by cutting rates or continue to play it safe?
Whatever he says, the outcome could shape the direction of the market for months to come, especially in the cryptocurrency sector.