Bitcoin price faced volatility today, briefly surpassing $85,500 before dropping significantly after Fed Chair Jerome Powell discussed tariff risks on imports and their potential economic impact. Powell indicated that escalating tariffs could challenge the Fed’s goals of balancing inflation and employment. Interest rates remained unchanged, and the crypto market is experiencing rising liquidations amid these uncertainties.
Bitcoin experienced notable price volatility today, initially exceeding $85,500, before experiencing a significant decline. This decrease followed comments made by Jerome Powell, the Chairman of the US Federal Reserve, regarding the potential economic impact of tariffs imposed on China and other nations. Powell indicated that a surge in imported goods to avert increased tariffs might negatively affect gross domestic product estimates.
During his address, Powell elaborated on the Fed’s challenging position, where it may need to balance controlling inflation against supporting economic growth. He stated, “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”
In response to subsequent questions, Powell suggested that escalating tariffs, potentially reaching 245% for China, could divert the Fed’s focus from its dual mandate of inflation control and full employment. Although he discussed the high-interest rates, Powell did not provide a clear indication of future Fed policy directions. Thus far, interest rates have remained static in two consecutive Federal Open Market Committee meetings this year.
Powell noted, “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.” While Bitcoin’s price reacted swiftly to these remarks, it fell to approximately $83,000 before regaining ground, stabilising just above $85,500. However, the uncertainty surrounding tariffs and interest rates contributed to its volatility.
Moreover, liquidations within the crypto market have surged, with nearly $300 million in losses being recorded daily and over 140,000 traders experiencing financial wrecks. These developments underscore the fragility of the market amidst economic uncertainties.
