Powell's Speech Implementation: How the Federal Reserve's Policy Tone Affects the Cryptocurrency and Risk Asset Markets

The key remarks from Federal Reserve Chair Powell have become a reality. The FOMC meeting held in Washington on January 27-28, along with Powell’s press conference in the early hours of January 28 (Beijing time), have become one of the most watched events in the financial markets at the start of 2026. This speech not only impacts crypto assets but also serves as an important indicator of the overall risk asset market trend.

Federal Reserve Decision Maintains Status Quo, but Internal Disagreement Is the Real Focus

The meeting, as expected by the market, kept the federal funds rate unchanged within the 3.50%-3.75% range. However, the real point of interest is not the probability of a rate cut (CME FedWatch tool previously showed less than 5%), but the rare split within the Federal Reserve Committee—at the last meeting, three members voted against the decision, with one advocating a significant 50 basis point rate cut, while the other two preferred to keep rates steady.

Powell must clearly explain the decision logic behind these disagreements during the press conference, which is especially sensitive given the timing before his term ends in May. When such obvious differences in stance emerge within the committee, the Chair’s statements often reveal the committee’s true future inclination.

Powell Faces Complex Background and Multiple Pressures

The current macro environment is far from simple. Inflation remains sticky (PCE data around 2.8%), and although the labor market has cooled, it is far from collapsing. Political pressure from the White House continues to mount, and Powell has recently publicly countered various doubts about the Fed’s independence. Against this backdrop, every statement he makes can be repeatedly interpreted by the market.

If Powell leans hawkish in his speech, emphasizing inflation risks and a cautious path toward rate cuts, the dollar may gain support while risk assets like Bitcoin face short-term pressure; conversely, if he signals a more dovish stance, focusing more on employment data and hinting at flexible future policy adjustments, market bullish sentiment could be triggered, pushing assets like BTC higher.

Market Sentiment in Waiting and Tug-of-War

From on-chain data and market sentiment, many crypto participants see Powell’s speech as a “decisive moment.” Historical experience shows that a dovish statement can ignite bullish enthusiasm, while hawkish or vague remarks tend to cause market volatility or even corrections.

During this period, BTC was repeatedly trading in the $85,000-$90,000 range, while safe-haven assets like gold and silver remained strong—this contrast itself reflects the market’s wait for policy guidance. According to the latest data, BTC’s current price has fallen to $76.88K, which may itself reflect market interpretation of the speech content.

Key Takeaways for Participants

For high-leverage traders, major events like Fed Chair speeches often bring intense volatility. Strict stop-loss settings are crucial for peace of mind. Regardless of Powell’s final stance, this is an important test of the monetary policy tone for 2026, and the entire market should observe carefully.

Interested investors can review the full speech via the Federal Reserve’s official website or various economic calendars, which can help develop a deeper understanding beyond secondary market interpretations. After all, subtle policy changes often determine the long-term direction of asset prices.