Fed Summary and Cryptocurrencies
Approximately one hour after Powell’s speech concluded and the release of the Fed members’ three-year interest rate estimates, Trump remains in the situation room with Iran as the agenda. His intention to make an announcement is unclear, but it’s evident that he leaves the door open to Iran even in this scenario. What will happen to cryptocurrencies following the Fed’s announcement? What should we pay attention to in recent statements?
The median interest rate forecasts exceeded expectations and, according to Powell, should be considered as a short-term uncertainty and risk, rather than a long-term projection. This detail was quite significant. Additionally, before the summer ends, it’s suggested better readings regarding tariffs and outcomes can be made.
Regarding the expectation of interest rate cuts, September is subtly indicated by the markets. The phrase “if tariffs didn’t exist, we’d be discussing other things today” sends a message to Trump, undermining his call for lower rates by implying inefficiency on his part. To summarize Fed’s communicated messages:
- Interest rate cuts will become appropriate eventually.
- The Fed will wait a few months to make smarter decisions.
- A significant inflation increase is expected in the coming months.
- Unemployment remains at acceptable levels.
- The extent of inflation increase will be revealed over time.
- This year’s inflation forecasts were revised upwards as tariffs are driving inflation.
- The Fed signaled a clear pause.
- Rising inflation might compel the Fed to cut rates in the third quarter amid economic slowdown.
- Economic uncertainty is noted to have decreased but remains high, with macro risks persisting despite reduced tariff uncertainties.
- The 2025 GDP growth forecast was lowered to 1.4%, signaling economic cooling.
- The 2025 inflation forecast was raised to 3.0% due to tariffs.
- The unemployment rate is expected to reach 4.5% by year-end, slightly higher than previous estimates.
- 7 out of 19 Fed members do not expect a rate cut this year.
- Current market expectation for a rate cut in September is at 70%.
- Powell cautiously highlighted both labor market weakening and the inflationary impacts of tariffs, saying the Fed will act upon data.
Major Breakthrough in Cryptocurrencies
While global economic and nuclear war risks loom, Bitcoin 
$104,424 remains at six-digit levels amidst fear and panic. There are persistent reasons why the rise should continue. Cryptocurrencies are experiencing one of their best periods in terms of their agenda, yet they are enduring one of their worst periods from a global context.
Tariffs will harm everyone, and a prolonged war with Iran will greatly strain its adversaries. If the ongoing debates don’t lead countries to self-isolation, negotiations will eventually resolve these issues. Otherwise, cryptocurrency declines will seem trivial.
Remember the days when Trump boldly spoke while negotiating with the EU and China. His style embodies instability, with unpredictability being his playfield, enabling him to change his mind easily. Facing the 2026 midterm elections amidst rising inflation, unemployment, economic recession, and the threat of new conflicts, he won’t want to approach voters under these conditions. Polls show over 60% of the public opposes war with Iran. Trump had previously pledged to withdraw from the Middle East, bringing troops home and limiting expenditures. There’s a vast contradiction in his actions.
In summary, we are on the brink of a significant breakthrough in cryptocurrencies, which will happen soon. DaanCrypto analyzed the chart and remarked:
“ETH continues to trade in this tight range as wicks are absorbed from both sides. This kind of compression typically results in a substantial move when one side gives in. Once the movement begins, it usually doesn’t stop quickly. Therefore, keep an eye on a higher time frame closing above or below the current range as confirmation.”
