The Fed's mixed signals: What Powell's speech means for Crypto Assets

Fed Chair Jerome Powell spoke at the Greater Providence Chamber of Commerce on Tuesday, outlining the central bank's economic outlook. His remarks triggered a mixed reaction in the markets—investors are now weighing what this means as the Fed plays an important role in risk assets like Crypto Assets. Fed reports show slowing growth with rising inflation. Powell stated that U.S. GDP growth slowed to 1.5% in the first half of the year, down from 2.5% last year. The unemployment rate remains low at 4.3%, but inflation data is concerning. The Fed's preferred measure, Core PCE, recently rose to 2.9%, above its 2% target. "Our policy does not have a preset direction. We will continue to determine the appropriate stance based on incoming data, changing outlooks, and the balance of risks," Powell said. Dovish or hawkish? The Fed strikes a cautious balance. Powell emphasized that short-term inflation risks are tilted to the upside, while employment risks are tilted to the downside—"a challenging situation." He described the current policy stance as "still somewhat restrictive," but acknowledged that there is room for further rate cuts if conditions allow. At the same time, he warned against acting too quickly: "If we ease policy too aggressively, we risk having inflation issues unresolved and may be forced to reverse course later to fully restore 2% inflation." CME futures currently indicate a 92% chance of the Fed cutting rates again by 0.25% at its meeting at the end of October. Wall Street responds cautiously. According to Fundstrat's Tom Lee, Powell's comments should not be seen as a bearish signal: "The Fed never says stock prices are attractive. The high valuations mentioned by Powell are not a warning, just a statement of reality." Powell pointed out: "When you look at some prices, they are high relative to historical levels... but we are not targeting any specific financial asset price level." The Crypto market remains supported. After Powell's speech, the Crypto market remained relatively stable: the total market cap held at $3.96 trillion, maintaining this range since mid-July. Bitcoin fell to $111,600 on Tuesday evening, then rebounded in Asia, regaining support at $112,000. Ethereum fell below $4,200 and has yet to recover that threshold. Despite the short-term weakness, analysts remain optimistic as the Fed continues to leave room for further easing. Key points from Powell: 🔹 Tariffs will cause prices to rise only once over several quarters 🔹 The Fed will ensure tariffs do not fuel sustained inflation 🔹 Employment risks have increased 🔹 Long-term inflation expectations remain at 2% #Fed , Powell, #FederalReserve , CryptoMarkets, #bitcoin stay ahead—follow our profile for all the important information in the world of Crypto Assets! Notice: The information and opinions provided in this article are for educational purposes only and should not be considered investment advice under any circumstances. The content of these pages should not be construed as financial, investment, or any other form of advice. We caution that investing in Crypto Assets may involve risks and may result in financial loss.