Fed Chair Jerome Powell's speech on April 16 sent a clear hawkish signal, emphasizing that in the trade-off between inflation and economic growth, priority inflation control remains the core of policy. Although the Trump administration's tariff policy may trigger the dual risk of slowing economic growth and rising prices, Powell made it clear that the Fed will maintain a "wait-and-see stance" and will not adjust the interest rate policy for the time being, waiting for more data guidance.

Market reaction: Rising risk aversion
1. U.S. stocks tumbled: After Powell's speech, the three major U.S. stock indexes accelerated their decline, with the Dow down 1.73%, the Nasdaq down 3.07%, and chip stocks leading the decline (such as Nvidia down 6.9%), reflecting market concerns about the economic outlook.
2. Divergent rate cut expectations: Although Powell did not give a path for rate cuts, the market is still betting on a rate cut in June, with a cumulative rate cut of 75-100 basis points for the year. However, there are differences in the Fed's assessment of the tariff shock, with some officials (such as Waller) advocating more aggressive rate cuts to hedge against recession risks, while Powell stressed the need to be wary of repeated inflation.
3. U.S. Treasury yields fell: U.S. Treasury yields fell in tandem with safe-haven demand driving capital flows into the bond market.
Impact on the currency circle: Short-term volatility is intensifying, and long-term may benefit from liquidity expectations
1. Risk-off vs. risky asset game: Powell's hawkish stance has exacerbated fears of economic "stagflation", which may weaken risk appetite in the short term, putting pressure on crypto assets such as Bitcoin. Page 5 mentions that the current market is more dominated by emotions and narratives, and a pullback may be a healthy trend, and if the support of $81,000 is solid, there is still a basis for a rebound.
2. Expectations of interest rate cuts underpin medium-term logic: If tariffs eventually force the Fed to pivot to easing, expectations of easing liquidity could boost the crypto market. However, in the short term, we need to be wary of fluctuations caused by policy uncertainty, especially the recurrence of Trump's tariff policy, which may exacerbate market volatility.
3. Changes in U.S. dollar volatility and correlation: If the U.S. dollar index fluctuates due to Fed policy divergence, it may indirectly affect bitcoin pricing. Historical data shows that a weaker US dollar is generally good for crypto assets, but the correlation between the two is weakening at the moment, and it is necessary to pay attention to the direction of capital flows.
Summary: Powell's statement highlights the Fed's policy dilemma in a complex environment, and the market may continue to be highly volatile in the short term. For the currency circle, macro uncertainty is still the dominant factor, investors need to pay attention to the June interest rate cut signal and inflation data, if the Fed turns to easing, crypto assets may usher in a new round of valuation repair. #WCTC S7 报名开启 #Gate.io 12周年 #加密安全见解 #BTC #ETH