Fed’s Powell Keeps Rate Cut Options Open, Crypto Markets Watch Closely

Federal Reserve Chair Jerome Powell maintained deliberate ambiguity on the timeline for interest rate cuts during Tuesday's House Financial Services Committee hearing. While refusing to commit to a July reduction, Powell left the door ajar by emphasizing data dependence: "If inflation pressures remain contained, we will get to a place where we cut rates sooner rather than later."

Market probabilities edged upward despite Powell's noncommittal stance, with CME Group data showing a 20.7% chance of a July cut versus 18.6% previously. The subtle shift suggests traders are interpreting the Fed's careful language as marginally dovish, particularly after two Trump-appointed governors—Waller and Bowman—publicly advocated for July easing.

Cryptocurrency markets typically react to liquidity expectations, with Bitcoin and other digital assets often benefiting from looser monetary policy. Powell's remarks come as analysts reassess inflation trajectories amid unexpectedly muted tariff impacts, creating potential tailwinds for risk assets.