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On April 16, 2025, Jerome Powell, the chairman of the Federal Reserve, delivered a speech titled 'Economic Outlook' at the Economic Club of Chicago, sharing views on the U.S. economy, monetary policy, and the impact of the Trump administration's tariff policies.

Powell's hawkish tone and persistent high-interest rate policies have captured the market's attention, especially regarding the impact on high-risk assets such as cryptocurrencies. This article analyzes the potential short-term and long-term effects of Powell's remarks on the <a href="/ja/price" target="_blank" class="blog_inner_link">crypto market</a> and provides insights for investors.

## Key Points of Powell's Speech

### Hawkish monetary policy

Powell said the current federal funds rate (4.25%-4.5%) will remain stable. He ruled out the possibility of a significant rate cut in the near term, considering a rate cut only when inflation significantly decreases or the job market weakens. High interest rates typically hit risk assets such as Crypto Assets as they reduce market liquidity and increase investors' opportunity cost.

### Tariffs and Inflation Risks

Powell warned that the new tariffs imposed by the Trump administration (20% on the EU, 46% on Vietnam) may exacerbate inflation and slow down economic growth. Higher inflation could delay rate cuts or lead to interest rates rising again, adding to market uncertainty.

### Economic Uncertainty

Powell pointed out that the US economy is facing "unusually high" uncertainty. Tariffs may lead to price increases and growth slowdown. In this case, investors may shift from risky assets such as encryption to safer options such as gold or the dollar.

## The Federal Reserve (FED) policy's impact on the crypto market

### Short-term impact (1-3 months): high interest rates and risk aversion

Powell's hawkish message implies that high interest rates will persist. This is unfavorable for crypto assets as they do not generate income like bonds or savings. Investors may <a href="/ja/crypto/sell" target="_blank" class="blog_inner_link">sell crypto</a> assets to reduce risk. For example, during the rate hike cycle in 2022, <a href="/ja/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> dropped from $69,000 to $16,000. In addition, tariff and inflation concerns may undermine market confidence.

Powell's concerns about slowing growth could drive more funds into safe assets. On social media, traders expect Bitcoin to test support at $85,000-88,000 soon, accompanied by higher volatility.

### Medium-term impact (3-12 months): Inflation vs. Recession

Tariffs may lead to inflation. In this case, some investors may react like they did during the COVID period in 2020. [Buy Bitcoin](/crypto/buy/bitcoin-btc) As a hedge. However, if inflation accompanies economic recession, investors may be more inclined towards traditional safe-haven assets such as gold or cash. The higher costs brought about by tariffs may also reduce investments in the technology and blockchain sectors, thus affecting the growth of the crypto ecosystem. There is currently no clear view on the Federal Reserve's future rate cuts.

Traders expect only two rate cuts (25 basis points each) by 2025. Powell's cautious tone makes early rate cuts less likely. If the US avoids a deep recession and inflation remains high, Bitcoin may benefit. However, if an economic downturn occurs, crypto assets may decline along with the stock market.

### Long-term Impact (Over 1 Year): Growth in Attraction to Decentralization

The uncertainty surrounding Federal Reserve policy and potential political interference (such as Trump's attempt to replace Powell) may make decentralized systems like crypto assets more appealing. Some investors may see Bitcoin as a way to hedge against central bank risks.

In addition, the encryption field continues to grow through innovation and institutional adoption (such as the inflow of funds into Bitcoin spot ETF), which supports long-term strength. Despite short-term fluctuations, cryptocurrencies may appreciate as a decentralized alternative in an unstable global economy.

## Investment Advice

### Short-term:

Exercise caution and reduce leverage
Focus on the support zone of $85,000-$88,000 for Bitcoin
Monitor economic data such as inflation and employment, as well as tariff updates

### Medium-term:

If inflation remains high, consider holding some crypto assets such as Bitcoin as a hedge
Pay attention to bond yields, the US dollar index, and the correlation between stocks and crypto assets

### Long-term:

Focus on quality assets (Bitcoin, <a href="/ja/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a>)
Establish long positions using pullbacks
Pay attention to regulations and adopt trend updates

## Conclusion

Powell's speech on April 16 emphasized the difficult balance of the Federal Reserve between high inflation, economic uncertainty, and political pressure. His hawkish tone and steady interest rate stance are short-term unfavorable to crypto assets. Tariffs may add more pressure.

However, in the long run, as trust in the central bank diminishes, the appeal of decentralized assets may increase. Investors should remain flexible, focus on key data, and manage risks and opportunities in this ever-changing market.

<div class="blog-details-info">
<div>Author: Rooick Z., Gate.io Researcher
<div class="info-tips">*This article represents only the author&#39;s point of view and does not constitute any trading advice. Investment involves risks, and decisions need to be cautious.
<div>* This article is original, and the copyright belongs to Gate.io. Please indicate the author and source if you need to reprint, otherwise legal responsibilities will be pursued.
</div><p></p>
</div></div></div>

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In-Depth Analysis of Fed Chair Powell's Speech and Its Impact on the Cryptocurrency Market