Bitcoin Slips Below $116K Amid Powell’s Hawkish Policy Outlook

Powell Warns on Inflation Risk From Tariffs; Bitcoin, Stocks Slip on Hawkish Tone

Federal Reserve Chair Jerome Powell reinforced the central bank’s cautious stance on interest rates Wednesday, warning that rising tariffs under President Trump’s economic agenda are contributing to renewed inflation risks.

“Tariff increases are lifting prices,” Powell said during the post-meeting press conference. “Short-term inflation expectations have edged higher.”

While the Federal Open Market Committee (FOMC) left the federal funds rate unchanged at 4.25%–4.5%—a move widely expected—two policymakers, Governors Michelle Bowman and Christopher Waller, broke ranks and advocated for a 25 basis point rate cut. It marked the first dual dissent since December 1993.

Despite political pressure from the White House and internal calls for easing, Powell held firm. “You might say we’re looking through inflation by not hiking,” he said, underscoring that the Fed sees no urgent need to tighten or loosen policy at this stage.

Markets reacted swiftly to the hawkish tone. Bitcoin (BTC) dropped nearly 2% to $115,800 in the immediate aftermath, while major equity indices reversed modest gains and closed in the red. Altcoins saw steeper declines: ether (ETH), solana (SOL), and XRP all fell roughly 4%.

While the Fed decision itself was no surprise, Powell’s direct comments on tariff-driven inflation signaled to markets that rate cuts may not arrive as quickly as some had anticipated—even amid rising internal dissent and ongoing pressure from President Trump.