Bitcoin News Today: Jerome Powell Signals No Near-Term Rate Cuts as Tariff Inflation Rises

Jerome Powell, Chair of the U.S. Federal Reserve, has reinforced a hawkish stance amid inflationary pressures linked to Trump-era tariffs, signaling that the central bank will not pursue rate cuts in the near term. During a recent FOMC speech, Powell emphasized that the inflationary impact of tariffs is just beginning and warned that reciprocal measures could amplify these effects in the coming months [1]. His comments have shifted market expectations, with the probability of a September rate cut dropping to 47.1% from over 63.7% just days before [5]. This sharp decline reflects a recalibration of expectations as investors adjust to the likelihood of prolonged higher interest rates [3].

Powell’s remarks came as U.S. inflation data revealed a 2.8% increase in core PCE, slightly above forecasts, and an overall PCE rise to 2.6%, also exceeding expectations [2]. Despite these numbers not representing an extraordinary surge, they contradict the downward trend that had previously supported hopes for easing. Powell reiterated that the Fed is committed to data-driven decision-making, not speculation, and will maintain a “wait-and-see” approach [7]. He also noted that any easing would hinge on clear evidence of cooling inflation and stable employment, with June’s PCE data and tomorrow’s employment figures playing pivotal roles [2].

The immediate market response was swift and bearish. Bitcoin, often regarded as a gauge for risk-on sentiment, fell below $116,000 as investors factored in prolonged rate hikes and inflationary headwinds [3]. The S&P 500 also erased earlier gains and turned negative following Powell’s speech [4]. A $0.2 billion liquidation event in the cryptocurrency market occurred shortly after, as traders reallocated positions amid growing uncertainty [9]. Analysts have noted that Bitcoin’s sensitivity to macroeconomic signals is greater than traditional equities, making it a more volatile barometer of market sentiment [10].

Powell’s stance has been interpreted as a continuation of the Fed’s strategy to “look through” inflation, a tactic used when certain price pressures are deemed temporary. However, he warned that if inflation becomes entrenched due to tariffs, the Fed will reassess its approach [8]. This cautious outlook has led investors to shift their focus to October and December meetings, with a 38.3% probability of a rate cut in October [6]. Yet, the odds of no further easing by December have also risen, reflecting a growing consensus that the Fed will remain cautious.

The coming weeks will be critical as the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation metric, is released. If the data shows a meaningful decline, it could create room for a more accommodative policy. For now, however, the Fed remains committed to its measured approach, prioritizing price stability over speculative easing [11]. Investors, particularly in the cryptocurrency space, will be closely monitoring these developments as they navigate an increasingly uncertain macroeconomic landscape.

Sources:

[1] CoinGape, [https://coingape.com/jerome-powell-says-trump-tariff-inflation-has-begun-bitcoin-crashes/](https://coingape.com/jerome-powell-says-trump-tariff-inflation-has-begun-bitcoin-crashes/)

[3] Binance, [https://www.binance.com/en/square/post/27674651494681](https://www.binance.com/en/square/post/27674651494681)

[4] Investor's, [https://www.investors.com/news/economy/federal-reserve-meeting-fed-chair-powell-gdp-jobs-data-sp-500/](https://www.investors.com/news/economy/federal-reserve-meeting-fed-chair-powell-gdp-jobs-data-sp-500/)

[7] Fortune, [https://fortune.com/2025/07/31/powell-rate-cut-raise-fomc-market-reaction-september-plan/](https://fortune.com/2025/07/31/powell-rate-cut-raise-fomc-market-reaction-september-plan/)

[8] CNBC, [https://www.cnbc.com/2025/07/30/fed-meeting-live-updates.html](https://www.cnbc.com/2025/07/30/fed-meeting-live-updates.html)

[9] 富途牛牛, [https://news.futunn.com/en/post/59878455/bitcoin-daily-powell-s-hawkish-remarks-trigger-200-million-in](https://news.futunn.com/en/post/59878455/bitcoin-daily-powell-s-hawkish-remarks-trigger-200-million-in)