Powell delivered a speech at the Greater Providence Chamber of Commerce on Tuesday, outlining the central bank’s economic outlook, which could heavily impact risk-on assets such as crypto.
He said that GDP growth has moderated to around 1.5% in the first half of the year, down from 2.5% last year, and unemployment remains low at 4.3%. Inflation figures were also pessimistic, recently rising to 2.9% for Core PCE, which is above the Fed’s 2% target.
There were mixed signals on whether the Fed has entered a new monetary policy cycle.
“Our policy is not on a preset course. We will continue to determine the appropriate stance based on the incoming data, the evolving outlook, and the balance of risks.”
Fed Still On The Fence
Powell emphasized that “near-term risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation.” He also described the current policy stance as “still modestly restrictive,” suggesting room for further easing if conditions warrant.
The dovish pivot with continued rate cuts generally supports risk assets like crypto, as lower rates reduce the opportunity cost of holding non-yielding assets. However, Powell cautioned about dropping rates too quickly. Upside inflation risks from tariffs could pause or reverse the easing cycle, which would be negative for crypto.
“If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2 percent inflation.”
Current CME futures markets predict a 92% chance that there will be another 0.25% rate cut at the Fed’s next meeting in late October.
Fundstrat’s Tom Lee remained optimistic, stating that the Fed has never said that assets such as stocks were attractively priced, so the speech should not be taken as an ominous signal.
Fed Chair Powell spoke at a conference today and this one comment unnerved some investors
Powell:
“I think if you look at some prices, then they’re elevated relative to historical levels…we’re not targeting any level of prices for particular financial assets. We don’t have a…— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) September 23, 2025
Crypto Markets Hold Support
The Fed’s emphasis on “no preset course” introduces uncertainty that crypto markets typically dislike. Markets have moved very little over the past 24 hours following their $200 billion slump earlier this week.
Total capitalization has held steady at $3.96 trillion, keeping it within a range-bound channel that began in mid-July. Bitcoin fell further to $111,600 in late Tuesday trading but managed to recover the $112,000 support level on Wednesday morning in Asia.
Ether has weakened, falling below $4,200 and failing to recover that level at the time of writing. Crypto analysts remained optimistic, however.
SUMMARY OF FED’S POWELL SPEECH:
● TARIFFS WILL ONLY CAUSE ONE-TIME’ PRICE INCREASES OVER SEVERAL QUARTERS.
● FED WILL MAKE SURE TARIFFS DON’T DRIVE ONGOING INFLATION
● DOWNSIDE RISKS TO EMPLOYMENT HAVE RISEN
● LONG-RUN INFLATION EXPECTATIONS IN LINE WITH 2% TARGET
●… pic.twitter.com/MtgaIel9cA
— Ash Crypto (@Ashcryptoreal) September 23, 2025
