Jerome Powell Holds Rates Steady—Is Crypto About to Breakout?

On June 24, 2025, Jerome Powell, Chair of the Federal Reserve, delivered his semiannual testimony to Congress, emphasizing a “wait-and-see” approach to interest rates. He noted the U.S. economy is in a “solid position,” with a strong labor market and inflation showing signs of moderation, but he highlighted concerns about potential inflationary pressures from recent tariff announcements. Powell’s stance indicates no immediate rate cuts, which could temper expectations for a crypto breakout in the near term.

Key Points

• Jerome Powell’s recent testimony suggests the Federal Reserve will likely maintain steady interest rates, creating uncertainty for crypto markets.
• Research indicates that lower rates typically benefit risk assets like cryptocurrencies, but Powell’s cautious stance may delay immediate gains.
• Bitcoin has shown volatility, dropping 23% earlier this month but recovering to $105,320 today, reflecting mixed market reactions.
• The evidence leans toward crypto markets remaining stable in the short term, with potential for growth if future rate cuts are signaled.
• Political pressure from President Trump adds complexity, as his tariff policies could influence Fed decisions and crypto sentiment.

Impact on Crypto Markets

Lower interest rates generally benefit cryptocurrencies by reducing the opportunity cost of holding non-yielding assets and stimulating economic activity, potentially increasing demand for digital currencies. However, with Powell holding rates steady, the crypto market has shown mixed reactions. Bitcoin, for instance, dropped over 23% earlier this month amid rate cut speculation but has since recovered, currently trading at $105,320. This volatility suggests investors are closely watching Fed signals for future policy shifts.

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Political and Economic Context

President Donald Trump has publicly criticized Jerome Powell, urging the Fed to cut rates to boost the economy. His recent tariff announcements add uncertainty, as they could lead to higher inflation, influencing the Fed’s decisions. Powell acknowledged this in his testimony, emphasizing the Fed’s obligation to prevent “ongoing inflation problems,” which adds complexity to the crypto market’s outlook.

Looking Ahead

While today’s testimony didn’t provide clear signals for immediate rate cuts, the overall message of economic stability could be positive for crypto in the long run. Investors remain hopeful that future Fed actions, potentially in September, could fuel risk-on flows and fresh bids for assets like Bitcoin. However, the market’s reaction will depend on how Powell’s cautious approach is interpreted in the coming months.