U.S. Federal Reserve Chair Jerome Powell signaled that the current cycle of interest rate cuts may be coming to a halt, triggering an immediate reaction across markets. Bitcoin, which had just tapped $94,000, quickly slipped to the $92,000 range as traders recalibrated expectations.

🔹 Signals Point to a Pause

During the post-FOMC press conference, Powell noted that recent policy moves have brought the Fed “within a range of plausible estimates of neutral.”

Translation: the central bank believes policy is now balanced enough to slow down and reassess.

Analysts interpret this as a strong sign that no further rate cuts are likely before the January 2026 FOMC meeting.

Powell did acknowledge rising risks in the labor market and still-elevated inflation — but stressed that no one expects a rate hike. At most, another small cut could come sometime in 2026, after three reductions already implemented this year.

🔹 Tariffs, Inflation, and the Trump Factor

Powell also highlighted the impact of Trump-era tariffs, calling them a source of one-time price increases, rather than long-term inflation.

If no new tariffs are introduced, he expects inflation to peak as early as Q1 2026.

🔹 Markets Shift — Only 24% Expect a January Cut

Fresh CME FedWatch data shows a dramatic turn:

24% expect a 25 bps cut in January

76% expect rates to stay unchanged

Powell said the Fed should have clearer insight by mid-January, with the CPI report due January 13 and PPI on January 14 — both key drivers of the next policy move.

🔹 Will Trump Redirect the Fed?

Bloomberg Chief Economist Anna Wong still believes the Fed could cut rates by up to 100 bps in 2026 due to weak job growth and cooling inflation.

But politics could reshape the outlook: Powell’s term expires in May 2026, and if Donald Trump returns to the White House, he is expected to appoint a more dovish Fed chair.

One leading candidate, Kevin Hassett, has openly said there is “plenty of room to cut.”

🔹 Bitcoin Reacts on Cue

After touching $94,000, Bitcoin slid back to ~$92,000 following Powell’s remarks — a familiar pattern throughout 2025. FOMC meetings and Powell’s cautious tone have repeatedly triggered short-lived dips across the crypto market.

🔍 Stay Ahead of the Curve

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The information and views presented in this article are for educational purposes only and should not be considered investment advice. Cryptocurrency investments carry risk and may result in financial loss.