Jerome Powell delivered his latest speech earlier today. Many investors were hoping for a clearer outlook on policy, especially as inflation has cooled and growth has slowed. Instead, the Fed Chair stuck to a cautious tone, providing little indication of when a shift might occur.
For the crypto market, which are highly sensitive to liquidity conditions, this lack of guidance offers little relief. Powell’s comments highlight ongoing uncertainty, leaving investors waiting for firmer signals before returning to risk assets.
Looking at Powell’s Speech
In his latest remarks, Powell reiterated that the United States economy remains in a solid position, though early data for the first quarter suggests growth is slowing. While vehicle sales were strong, broader consumer spending showed only modest gains.
A rise in imports, largely driven by businesses trying to get ahead of new tariffs, is expected to act as a drag on gross domestic product growth.
Turning to the labour market, Powell pointed out that conditions remain stable. The economy added an average of 150,000 jobs per month over the last quarter, and unemployment remains low.
Job openings still outnumber available workers slightly, which suggests some underlying tightness, though wage growth is gradually easing. He added that wage increases are currently outpacing inflation, a dynamic that supports spending without significantly increasing price pressures.
On inflation, Powell acknowledged progress but maintained that current levels remain above target. Headline personal consumption expenditures increased by 2.3% over the past twelve months, while core inflation, which excludes food and energy, rose by 2.6%.
He made it clear that although inflation has fallen from its peak, the Federal Reserve still needs more evidence before adjusting its policy.
Powell also addressed potential impacts from recently announced tariffs. He warned that these measures are likely to push inflation higher in the short term.
However, the overall effect will depend on how persistent those price increases become. The Fed’s main concern remains keeping long-term inflation expectations stable.
Importantly, Powell offered no concrete timeline or indication of a pivot in policy. He reiterated that the central bank will remain data-dependent and that decisions will be made only after assessing a broader set of incoming information.
While that approach is expected, it did not satisfy market participants who were hoping for more clarity.
The Current Market Sentiment
Crypto traders were closely watching this speech. Many hoped Powell would hint at an eventual shift toward lower interest rates, which typically improves risk sentiment.
Instead, his neutral stance and reluctance to signal any policy change have left markets in limbo. The broader reaction suggests disappointment, particularly among those anticipating a more accommodative tone.
Current data from Lookonchain reinforces this cautious environment. Net flows into spot Bitcoin exchange-traded funds remain negative, showing that institutional investors are not rushing to accumulate. Large wallet addresses are generally reducing exposure rather than building positions.
These movements indicate that institutions are wary of adding risk while the macro outlook remains uncertain. This behaviour is consistent with Powell’s speech. Without clear policy support, institutions are waiting.
There is no strong reason to become aggressive in this market, and many are opting to preserve capital rather than take speculative positions. The result is a market that is stable but lacks momentum.
The cautious mood has been building over recent weeks. As inflation slows but remains elevated, and as growth shows signs of softening, investors are beginning to question how long current conditions can persist.
The crypto market tends to benefit from increased liquidity and lower borrowing costs. Neither appears likely in the near term.
With no indication of interest rate cuts and continued warnings about inflation risks, the environment remains challenging for those looking to allocate aggressively into digital assets.
The lack of strong institutional inflows is a clear signal that the current macro setup is not yet favourable for renewed risk-taking.
Conclusion
Powell’s speech did not shift the tone and left the market without a clear policy signal. For crypto, this maintains the current state of caution.
With inflation still above target and growth slowing, the Federal Reserve is choosing to wait rather than act. Institutional flows reflect that same hesitancy.
Until stronger signals emerge or monetary policy begins to support risk assets, crypto markets may remain subdued. Patience will be essential, and risk management will remain the priority for most investors.