What happened before and after Powell's speech?
Written by: Pzai, Foresight News
On April 17, Federal Reserve Chairman Powell reiterated at the Chicago Economic Club that the Fed will remain cautious about rate cuts and consider rate reduction actions only when the situation becomes clearer, warning of the Fed's challenging dilemma of conflicting inflation and economic goals. Powell also denied the possibility of a Fed Put rescue and emphasized that the market is orderly and functioning as expected.
Influenced by Powell's views, cryptocurrencies experienced slight fluctuations. Bitcoin's latest quote was $83,921, reaching a daily high of $85,511, with a 24-hour increase of 0.19%. The weekly high was $86,512, the low was $83,150, with a weekly increase of 0.27%.
For mainstream assets, ETH, BNB, SOL and other assets showed moderate reactions. Solana increased by 2.6% in a single day, approaching the $130 mark; ETH slightly dropped by 0.7%, falling to around $1,580; BNB slightly decreased by 0.7% to $581. For ETFs, Bitcoin spot ETF had a daily net outflow of $200 million, with total net asset value of $9.361 billion. Ethereum spot ETF had a daily net outflow of $7.74 million, with total net asset value of $5.3 billion.
According to derivatives data from Coinglass, over 134,000 liquidations occurred in the past 24 hours, totaling $275 million, with long positions liquidated at $161 million.
Influenced by related factors, the three major US stock indices accelerated downward, hitting daily lows at closing. The Dow fell over 970 points, more than 2%; S&P index fell over 3%; Nasdaq fell over 4%.
The "Tech Seven Giants" showed a generally declining trend. Nvidia hit a daily low in the afternoon, dropping about 10.5%, ultimately closing down nearly 6.9%. Tesla closed down nearly 5%, Apple fell close to 3.9%, Microsoft and Meta both fell around 3.7%, Amazon dropped over 2.9%, and Alphabet fell 2%.
After Trump's government delayed tariff implementation, market expectations for Fed rate cuts in the second half of 2025 briefly warmed, but Fed analysts pointed out that even with tariff suspension and reduced inflation impact, rate cuts still face extremely high barriers. What happened before and after Powell's speech?
Rate Cuts "Cannot Rescue Immediate Fires"
Powell further elaborated on the complex economic landscape: Q1 2025 growth slowed from last year's steady pace. Despite strong car sales, overall consumer spending momentum is insufficient. Businesses' concentrated imports ahead of potential tariffs are expected to pressure GDP growth, while stagnant labor growth and government layoffs also impact the job market. He said: "If the US becomes a jurisdiction with higher structural risks in the future, this will reduce our attractiveness as a jurisdiction."
Market analysis generally believes that if tariff suspension effectively alleviates imported inflation pressure, the Fed might delay rate cuts in the medium to long term. Conversely, if global trade friction continues to ferment or escalate, short-term risk assets will be under pressure, and the Fed's monetary policy will face more complex trade-offs - finding balance between curbing inflation and avoiding excessive economic contraction. Powell candidly admitted, "The pulse we're feeling is higher unemployment and higher inflation rates, and our tools can only do one of these two things at a time, so it's a difficult situation for central banks."
Bloomberg economist Chris G. Collins believes: "These remarks indicate that the Fed will prioritize the inflation aspect of its dual mandate, as they await more information on how government policies will affect the economy."
In crypto stocks, the top crypto US stocks mostly declined, with an average drop of around 2%, while MSTR slightly rose by 0.3%. Powell's clear "rate cut wait-and-see" signal and warning about conflicts between inflation and economic goals undoubtedly increased market uncertainty about policy direction.
Image source: The Block
The current market faces multiple contradictions: tech stock overvaluation and performance realization pressure, gold hedging demand versus US dollar resilience, tariff policy uncertainty, and Fed monetary policy divergence. IUR Capital Managing Director Gareth Ryan stated: "The sentiment towards US risk assets shows long-term scarring. If no significant progress is made in trade negotiations with major US trading partners within the next 90 days, the stock market might face a challenging summer."
In the crypto market, Coinbase's latest report indicates that extreme negative sentiment has emerged due to global tariff implementation and potential further escalation. Although regulatory slowdown led to an increase in crypto venture capital in Q1 2025 compared to the previous quarter, it remains 50-60% below the peak levels of the 2021-2022 cycle, significantly limiting new capital entry into the crypto ecosystem, especially in the Altcoin sector. This could lead to long-term expectations of market liquidity decline. In the medium to long term, attention should be paid to the Fed's interpretation of economic data, global supply chain recovery, and the third crypto policy roundtable on April 25.
