Bitcoin Maintains Momentum — Powell's Inflation Warning Shakes Market Sentiment

The Fed has decided to hold interest rates steady in the FOMC meeting on Wednesday, as the market had anticipated. However, the hawkish remarks from Chairman Jerome Powell regarding the inflation risks due to the new tariffs from President Donald Trump have caused significant fluctuations in investor sentiment. Stay tuned Interest Rates, High Inflation Pressure Increase According to the announcement, the Fed continues to hold the interest rate at 4.25% – 4.50% for the fifth consecutive time in the context of inflation remaining high. This aligns with analysts' expectations. However, new developments from the White House have complicated the situation: President Trump imposed a 25% tariff on India, 15% on Japan and the European Union (EU), and 30% on China. Mr. Powell warns: "The increase in tariffs is pushing prices of goods higher," implying that inflationary pressures will continue to rise. Typically, rising inflation will force the Fed to raise interest rates in order to reduce consumer demand. Although this time the Fed has not raised interest rates, Powell affirmed that they will be "ready to act" if inflation goes out of control. Impact on Bitcoin and the Crypto Market Right after the announcement, Bitcoin (BTC) dropped sharply below 116,000 USD on Wednesday due to concerns that the Fed will raise interest rates in the near future. However, on Thursday, the BTC recovered by 0.50%, returning to the level of 118,000 USD. The Fear & Greed Index remains high, reflecting the investors' excited yet risk-concerned sentiment. Major altcoins are also experiencing significant fluctuations: Ethereum (ETH): recovered more than 1% after forming a Doji candlestick pattern on Wednesday. Ripple (XRP) and Solana (SOL): both rose about 2% on Thursday, erasing the entire 1–2% drop from the previous day. Meaning for Investors Keeping interest rates unchanged often helps risky asset markets like Bitcoin ( to flourish due to low borrowing costs, stimulating investment flows. However, Powell's hawkish remarks and the context of rising import costs due to tariffs increase the risk of higher inflation, meaning the Fed may raise interest rates in the near future. If this happens: The cost of borrowing will be higher. Market liquidity is decreasing. Demand for Bitcoin and altcoins may weaken. 💡 Conclusion: In the short term, the crypto market continues to maintain its recovery momentum, but macroeconomic factors – especially interest rate policies and tariffs – will be significant variables determining price trends. Investors need to closely monitor statements from the Fed and the developments in global trade tensions.