In Focus This Week: Bitcoin Reacts to Powell’s Speech, U.S. Inflation Data, and Tariff Countdown

Bitcoin Steadies Above $100K as Markets Turn to Powell, Inflation Data, and Tariff Countdown

Bitcoin remains firmly above the $100,000 level, shrugging off initial fears of a deep selloff after U.S. airstrikes targeted Iran’s nuclear facilities. As geopolitical tensions ease for now, traders are shifting focus to a critical week filled with economic signals that could steer the next big move for both crypto and broader markets.

All Eyes on Powell’s Testimony

A major highlight this week will be Federal Reserve Chair Jerome Powell’s semi-annual testimony before Congress. Powell is expected to face tough questioning from Republican lawmakers, who have criticized the Fed’s reluctance to cut interest rates. Former President Donald Trump has frequently attacked Powell on social media, blaming him for damaging the economy and costing the country billions.

Despite political pressures, Powell is likely to emphasize the Fed’s independence and its data-driven approach. Markets will be watching closely for any hints about the timing or size of potential rate cuts.

Adding to the speculation, Fed Governor Christopher Waller recently indicated that rate cuts could begin as early as July.

“With inflation expectations under control, signs of softening in the labor market, and housing still struggling, there’s a strong case for the Fed to pivot dovish in July and possibly hint at a September cut,” said Chris Weston, head of research at Pepperstone, on X. “Markets have already priced this into U.S. swaps.”

A more dovish stance from Powell could spark renewed interest in risk assets like bitcoin.

Uncertainty Around Fed Policy

While markets are currently pricing in two rate cuts this year, not all analysts are convinced.

“We think the Fed may wait until December for clarity on whether tariffs will create lasting inflation,” analysts at ING said Friday. “That leaves room for just one cut, unless labor market conditions worsen, which could even justify a larger 50-basis-point move.”

Core PCE Data Takes the Stage

Another key focus this week is Friday’s release of the core personal consumption expenditures (PCE) price index, the Fed’s preferred gauge of inflation. Economists expect a modest 0.1% monthly increase for May, translating to a 2.6% annual pace and a three-month annualized rate of 1.6%, according to Pepperstone estimates.

A softer-than-expected reading would strengthen hopes for rate cuts. However, ING cautions that Trump’s proposed tariffs could reignite inflationary pressures once they take effect.

Trump’s 90-day pause on reciprocal tariffs, announced in April, is set to expire on July 9. Without new agreements, sweeping “Liberation Day” tariffs will kick in. So far, Trump has secured a deal with the U.K. and outlined a framework with China, though Beijing has not formally signed, and discussions with the EU remain unresolved.

Iran Still Looms in the Background

Although oil markets have calmed, geopolitical risks persist. Iran has yet to block the Strait of Hormuz—a critical passageway for roughly 20% of the world’s oil shipments—but even the threat of closure has pushed shipping insurance costs sharply higher, jumping from 20 cents to 80 cents per barrel, the South China Morning Post reported, citing Athens-based Xclusiv Shipbrokers.

“Iran doesn’t have to physically shut down the strait to disrupt markets,” Weston noted. “Just creating enough uncertainty can drive up shipping costs and rattle oil and gas flows.”

As traders brace for an event-packed week, bitcoin’s stability above $100,000 signals cautious optimism. Yet with Powell’s testimony, crucial inflation data, and tariff developments on the horizon, the crypto market remains poised for potential volatility.