Powell's Speech Comes to Fruition: How Recent Federal Reserve Decisions Will Impact Crypto and Risk Assets

Federal Reserve Chair Powell’s recent comments at the FOMC press conference once again drew the attention of the cryptocurrency and risk asset markets. The meeting not only announced the interest rate decision but, more importantly, Powell’s explanation of the current monetary policy direction directly influenced market expectations for future economic prospects.

Federal Reserve FOMC Meeting Results: Rates Hold Steady, Powell’s Stance Becomes Key

According to the meeting statement, the Federal Reserve decided to keep the federal funds rate unchanged in the 3.50%-3.75% range, a result largely in line with market expectations (CME FedWatch tool showed the probability of rate cuts once fell below 5%). However, what truly stirred the market was Powell’s wording and stance during the press conference.

Internal disagreements within the committee exceeded market expectations — in the previous decision, three members voted against the majority, reflecting a rare split within the Fed on policy direction. One member advocated for a significant 50 basis point rate cut, while the other two preferred to hold rates steady. This divergence required Powell to clearly articulate the committee’s overall decision-making logic in his remarks.

Complex Macro Environment: Sticky Inflation and Employment Data Dilemmas

The current economic environment is indeed challenging. The Personal Consumption Expenditures (PCE) price index remains around 2.8%, indicating persistent inflation stickiness; while the labor market has cooled, it is far from “collapsing,” providing the Fed with ongoing reasons to monitor closely. Meanwhile, the White House has increased pressure on the Fed’s independence, with Powell publicly countering related doubts multiple times, emphasizing the Fed’s policy autonomy.

In this context, Powell’s tone becomes especially important. If leaning hawkish (highlighting concerns about inflation and no plans for rate cuts in the short term), the dollar could strengthen, and risk assets like Bitcoin may face short-term pressure; conversely, if more dovish signals emphasizing concern for employment are released (implying flexible policy paths), risk appetite could be reignited, pushing assets like BTC higher.

Impact of Speech and Market Reactions: From Expectations to Reality

On-chain data and market sentiment show that many traders view this speech as a clear signal of “policy direction.” Historical experience suggests that a dovish statement can ignite bullish enthusiasm, while hawkish or vague language often triggers volatility or even corrections. Before the announcement, BTC repeatedly tested the $85,000-$90,000 range, while traditional safe-haven assets like gold and silver remained strong. This pattern essentially reflects the market’s conflicting mindset while waiting for Fed guidance.

After the speech, Bitcoin prices adjusted, with the latest data showing BTC at $73.46K. This correction partly reflects Powell’s emphasis on persistent inflation and cautious attitude toward the timing of rate cuts. Volatility in risk assets has clearly increased, especially impacting highly leveraged positions.

Market Insights and Future Outlook

The true significance of this speech lies in establishing the Fed’s policy tone through 2026 — prudent and flexible, but with no easing of inflation concerns. For the crypto market, Powell’s wording indicates that large-scale rate cuts are unlikely in the near term, meaning the high-interest-rate environment may persist for some time.

Market participants need to reassess the attractiveness of risk assets. The continued strength of gold and silver indicates lingering doubts about economic prospects, adding pressure on Bitcoin’s value as an alternative asset. On-chain indicators show retail holdings have adjusted after the correction, and institutional confidence is watching for upcoming central bank actions.

Regardless, Powell’s speech marks an important turning point in the Fed’s monetary policy outlook through 2026. Markets will need to reposition themselves under the new interest rate environment and policy expectations, which will have profound implications for the long-term development of cryptocurrencies.