Powell's Patience: Fed Holds Steady as Tech, Crypto Tumble

Federal Reserve Chairman Jerome Powell emphasized a patient approach to interest rate adjustments in a speech on Tuesday, indicating that officials will maintain patience on the rate-cutting issue. Powell's remarks came as the U.S. economy continues to show strength, with a stable labor market and inflation still above the 2% target.

Following Powell's speech, the three major U.S. stock indexes closed with mixed performance. The Dow rose 0.28%, the S&P 500 rose 0.03%, and the Nasdaq fell 0.36%. Most large-cap tech stocks fell, with Tesla plummeting by 6.34% and Nvidia ending a five-day winning streak.

The crypto market followed the tech stocks lower, with Bitcoin experiencing significant volatility and dipping below $95,000 at one point. Ethereum showed even weaker performance, with a price decline of nearly 3% to the current price of $2,603. Most altcoins also experienced significant declines, reflecting a pessimistic market sentiment and investor concerns about macroeconomic policies.

The market generally believes that Powell's speech summarized the Fed's roadmap for 2025: if the downward trend in inflation does not improve, keep rates unchanged; if the economic slowdown is greater, cut rates. Data shows that most economists expect the Fed to cut rates again in the next quarter, while the previous consensus was for a rate cut in March. The next two days will see the release of the latest inflation data, with the U.S. January CPI on Wednesday and the PPI inflation data on Thursday.