The cryptocurrency market is facing significant downturns due to tariff wars initiated by Donald Trump’s administration. Bitcoin has dropped considerably, and top altcoins follow suit. Federal Reserve Chair Jerome Powell is set to speak about future inflation and the Fed’s strategies amid these uncertainties. Analysts are keenly awaiting insights from Powell regarding potential inflationary trends and their implications on interest rates.
The current market uncertainty, driven by Trump’s tariff war, has raised concerns about a potential financial crisis within this quarter. The tariff policies have adversely affected global markets, causing cryptocurrencies to decline, with Bitcoin falling to approximately $74,000 from $84,000. Major altcoins also experienced significant price drops, breaking through crucial support levels.
Federal Reserve Chair Jerome Powell is scheduled to address the Economic Club of Chicago at 1:30 p.m. EDT (23:00 IST), where he will discuss his views on future inflation rates and employment opportunities. Analysts are particularly interested in whether he will outline the Fed’s short-term strategies in response to these economic challenges.
Powell’s last speech on 04th April came in the wake of Trump’s revised tariff scheme, which has exacerbated tensions between the USA and global partners, particularly China. Trump’s administration has imposed a base tariff of 10%, and any country opposing these tariffs faces retaliatory measures, escalating the trade conflict.
In light of the suspended tariff adjustments for 90 days, Powell warned that the tariff war could lead to significant financial disruptions, higher inflation, and slowed growth. The Federal Reserve is thus confronted with difficult decisions amid these complexities.
Fed Governor Christopher Waller remarked that a reduction in tariff levels might result in more favourable interest rate cuts from the Fed. However, increased tariffs risk escalating unemployment, pushing the Fed towards more aggressive rate cuts. Currently, the specifics of Powell’s agenda remain unclear, but speculation suggests a potential focus on short-term inflation trends during his speech, which could lead to elevated inflation rates or further hikes.
