Original author: Pzai, Foresight News
On April 17, Fed Chairman Powell reiterated in a speech at the Chicago Economic Club that the Fed will wait and see about rate cuts and consider them only after the situation becomes clearer. He also warned that the Fed faces the dilemma of conflicting inflation and economic goals. Powell also denied that there would be a Fed Put to save the market, emphasizing that the market is orderly and operating in line with expectations.
Affected by Powells views, cryptocurrencies fluctuated slightly. The latest price of Bitcoin reached $83,921, with a daily high of $85,511, a 24-hour increase of 0.19%. The highest price during the week reached $86,512, and the lowest price was $83,150, with a weekly increase of 0.27%.
In terms of mainstream assets, ETH, BNB, SOL and other assets reacted flatly. Solana rose 2.6% in a single day, approaching the $130 mark; ETH fell slightly by 0.7%, falling back to around $1,580; BNB fell slightly by 0.7% to $581. In terms of ETFs, the Bitcoin spot ETF had a net outflow of $200 million in a single day, with a total net asset value of $93.61 billion. The Ethereum spot ETF had a net outflow of $7.74 million in a single day, with a total net asset value of $5.3 billion.
In terms of derivatives data, according to Coinglass, in the past 24 hours, more than 134,000 people had their positions liquidated, with a total amount of US$275 million, of which long positions were liquidated for US$161 million.
Affected by relevant factors, the three major US stock indexes accelerated their downward trend and hit new lows of the day at the end of trading. Among them, the Dow Jones Industrial Average fell by more than 970 points, a drop of more than 2%; the SP 500 fell by more than 3%; and the Nasdaq fell by more than 4%.
Among them, the Seven Big Tech Companies showed a general decline. Nvidia hit a new low in the afternoon, down about 10.5%, and finally closed down nearly 6.9%. Tesla closed down nearly 5%, Apple fell nearly 3.9%, Microsoft and Meta both fell nearly 3.7%, Amazon fell more than 2.9%, and Alphabet fell 2%.
After the Trump administration delayed the implementation of tariffs, market expectations for a Fed rate cut in the second half of 2025 briefly rose, but Fed analysts pointed out that even if the tariff suspension continues and the impact of inflation weakens, rate cuts still need to cross a very high threshold. What happened before and after Powells speech?
Interest rate cuts cannot put out a fire
In his speech, Powell further elaborated on the complex picture facing the economy: the growth rate in the first quarter of 2025 slowed from last years steady pace. Although auto sales were strong, overall consumer spending lacked momentum. Companies concentrated imports ahead of potential tariffs are expected to put pressure on GDP growth, while stagnant labor force growth and government layoffs also had a certain impact on the job market. He said: If the United States becomes a jurisdiction with higher structural risks in the future, it will reduce our attractiveness as a jurisdiction.
Market analysts generally believe that if the suspension of tariffs can effectively ease imported inflation pressure, the Federal Reserve may delay the interest rate cut process in the medium to long term; on the contrary, if global trade frictions continue to ferment or even escalate, risky assets will be under pressure in the short term, and the Federal Reserves monetary policy will also face a more difficult trade-off - finding a balance between curbing inflation and avoiding excessive economic contraction. Powell also admitted that the pulse we feel is higher unemployment and higher inflation, and our tools can only do one of these two things at a time, so this is a difficult situation for the central bank.
The comments suggest the Fed will prioritize the inflation side of its dual mandate as it awaits more information on how government policies will affect the economy, said Chris G. Collins, an economist at Bloomberg.
In terms of crypto stocks, the top few crypto stocks all closed down, with an average decline of about 2%, while MSTR rose slightly by 0.3%. Powells clear signal of wait-and-see on rate cuts and warnings about the conflict between inflation and economic goals have undoubtedly exacerbated the markets uncertainty about the direction of policy.
Image source: The Block
The current market faces multiple contradictions: the high valuation of technology stocks and the pressure of performance realization, the struggle between the safe-haven demand for gold and the resilience of the US dollar, and the uncertainty of tariff policies and the divergence of the Federal Reserves monetary policy. Gareth Ryan, managing director of IUR Capital, said: Sentiment towards US risk assets shows signs of long-term scars. If there is no significant progress in trade negotiations with major US trading partners in the next 90 days, the stock market may usher in a difficult summer.
In the crypto market, Coinbase said in its latest report that some extreme negative sentiment has emerged due to the implementation of global tariffs and the potential for further escalation. At the same time, although the slowdown in regulation has led to an increase in venture capital funding for cryptocurrencies in the first quarter of 2025 compared with the previous quarter, it is still 50%-60% lower than the peak of the 2021-2022 cycle, which greatly restricts the entry of new capital into the cryptocurrency ecosystem, especially in the field of altcoins, which may lead to a long-term decline in market liquidity expectations. In the medium and long term of the market, attention should be paid to the Federal Reserves interpretation of economic data and the progress of global supply chain repairs, as well as the third crypto policy roundtable held on April 25.
