The selling pressure caused by the tariffs announced by US President Donald Trump continues to be effective in both global markets and the cryptocurrency market.
At this point, while the FED is expected to cut interest rates for recovery in the face of ongoing negative winds, all eyes are on the statements to be made by FED Chairman Jerome Powell today.
Powell will speak at 18:25 GMT.
What to Expect?
After the FED kept the interest rate constant at 4.25%-4.5% in March, citing the current economic uncertainty, Powell is expected to make important statements about the economic outlook and signal the next interest rate decision in his speech.
After Trump announced tariffs with 185 countries, including China, the US has increased concerns that inflationary pressure will continue in the country. Analysts believe that the FED will have a difficult job amid the inflation-recession dilemma.
At this point, analysts state that the importance of Powell’s speech has increased, and they expect the clues Powell will give to have an impact on the direction of both the global and cryptocurrency markets.
While the markets expect the FED to make four interest rate cuts in 2025, a rate cut in June is priced in at 83%.
Citi analysts said they expect the Fed to look favorably on further easing, even if higher tariffs continuing for at least the next few months would significantly increase inflation.
“Ultimately, we expect authorities to remain dovish and cut rates by 125 basis points this year despite current tariffs,” Citi analysts said.
What Do FED Officials Think?
According to the statements made by FED officials, FED Vice Chairman Philip Jefferson stated that the FED will act depending on the progress of inflation and the labor market. Accordingly, the FED may continue the current tight policy for a longer period or may loosen the policy. Jefferson added that he expects a moderate softening in the labor market this year.
FED member Lisa Cook said that uncertainty about tariffs between the US and other countries could cause the economy to weaken. Cook said that the decrease in economic uncertainty in the US and the easing of inflation would make it easier to cut interest rates.
*This is not investment advice.
