Bitcoin and crypto have rebounded after a major escalation in the Israel-Iran conflict sent prices spiraling amid fears of a “doomsday” scenario.
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The bitcoin price has climbed back over $100,000 per bitcoin, helped by U.S. president Donald Trump’s shock prediction of “massive” crypto investment.
Now, as the market digests a Congress game-changer expected to “unleash” trillions, bitcoin and crypto prices are braced for Federal Reserve chair Jerome Powell’s semi-annual testimony before lawmakers—coming after Trump suddenly flipped on firing him.
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U.S. Federal Reserve chair Jerome Powell has committed to keep interest rates on hold, with some … More
“Aside from any geopolitical updates, today’s key event will be Fed chair Jerome Powell’s testimony in Washington,” David Morrison, senior market analyst at Trade Nation, said in emailed comments.
Trump posted to his Truth Social account over night that the Federal Reserve board should “activate,” forcing Powell, who he’s branded “too late,” to cut rates by “at least two to three points,” and “save the U.S. more than $800 billion per year.”
“I hope Congress really works this very dumb, hardheaded person, over,” Trump added.
The Fed kept interest rates on hold again last week after kicking of a reduction cycle in September that’s been put on pause due to fears Trump’s global trade tariffs could see a return of inflation.
“All eyes are on the Federal Reserve chair Jerome’s testimony before Congress and Friday’s PCE inflation print to determine how close the Fed may be to its long-awaited policy pivot,” Ray Youssef , the chief executive of NoOnes, said via email.
“The most bullish scenario would be confirmation of a Fed dovish policy pivot or a major de-escalation in global trade and geopolitical tensions, either of which could spark renewed interest in risk assets and push bitcoin towards retesting its all-time high.”
Expectations around an eventual Fed interest rate cut have been built up by crypto traders and influencers on social media.
“Buckle up,” one crypto trader posted to X alongside a hopeful prediction that “trillions” will flow in to crypto once the Fed eventually cuts rates—now priced at a 22% chance in July, up from just 10% last week, according to the CME FedWatch tracker.
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The bitcoin price has rocketed over the last year, with some predicting the bitcoin price will climb … More
Two Fed officials, Federal Reserve vice chair for supervision Michelle Bowman and Federal Reserve Bank of Chicago president Austan Goolsbee, have this week joined Fed governor Christopher Waller admitting it may be time to lower interest rates.
“It is time to consider adjusting the policy rate,” Bowman told a gathering held in Prague, it was reported by Reuters, while Goolsbee reportedly said that Trump’s trade tariffs have “not been what people feared.”
Powell has pointed to the expected increase in inflation as a result of Trump’s so-called Liberation Day of global trade tariffs as reason to take a “wait-and-see” approach to adjusting interest rates.
Last week, Waller has said he doesn’t expect Trump’s tariffs to drive inflation higher so policymakers should be looking to lower interest rates as early as July.
“If you’re starting to worry about the downside risk [to the] labor market, move now, don’t wait,” Waller told CNBC.
