The Chairman of the U.S. Federal Reserve, Jerome Powell, delivered a message that shook Wall Street and the crypto ecosystem alike. His statements, seemingly ambiguous, were interpreted as negative by the markets, causing a sharp drop in risk assets:


📉 The S&P 500 fell sharply.

🪙 Bitcoin fell below $116,000, erasing some of its recent gains.



🗣️ What exactly did Powell say?



“If we were strict with monetary policy, we should be raising the interest rate.”



This single phrase was enough to set off alarms. Although no direct decision was announced, the tone suggested that rates could remain high for longer… or even rise.



💡 Why do these words matter so much?


Powell gave several important signals:




  • ⚠️ Inflation remains the priority, more than employment.




  • 📉 “We have not made any decision about September.”




  • 💸 Acknowledges that tariffs are starting to generate inflation, something that could accelerate more aggressive decisions.




In summary, the FED does not yet see reasons to relax monetary policy. And this directly impacts global liquidity, the main driver of rallies in stocks and cryptocurrencies.



🤔 And the Treasury? Ally or silent rival?


In parallel, Bessent (from the Treasury) announced that they will increase bond buybacks to lower yields. Some analysts believe this move may have more impact than any FED decision.


This raises a key question:



Is a battle between the FED and the Treasury beginning for control of the market?




🔮 What can we expect now?


📌 The focus will shift to employment data, as Powell emphasized that it is the most important factor to assess the economic direction.

📌 If the data shows labor cooling, there could be pressure to lower rates.

📌 But if employment remains strong, the market must prepare for a high-rate environment for longer.



📈 And the crypto market?




  • Bitcoin reacted with an immediate drop, but still remains in a key technical zone.




  • If the policy remains restrictive, we could see more downward pressure in the coming days.




  • However, the Treasury's announcement could balance the game if it manages to sustain liquidity.





✅ Conclusion


Powell's speech left more doubts than certainties, but one thing is clear:

The market no longer operates with “dovish” expectations. Now everything will depend on the data… and the delicate balance between the FED and the Treasury.


Are we on the brink of a new bearish phase or in the midst of a more complex political game?



📣 Share this article and comment your opinion!

Is the FED acting logically… or have we entered political territory?



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