Powell Statement Revives Crypto Market Concerns on Rate Cuts

Key Insights

• The crypto market reacts to Powell’s warning, as investors question how future rate decisions will be made.
• Rate-cut expectations for 2026 remain low, keeping the market cautious about liquidity.
• Gold and the crypto market respond to the same signal, as both rise when confidence in policy decisions weakens.

Crypto market reacted after a serious public statement from Jerome Powell. Powell is the chair of the Federal Reserve, the group that decides interest rates in the United States.

Powell said the Department of Justice sent legal subpoenas to the Federal Reserve. These were connected to his Senate testimony in June 2025. He said the real issue was not about a building project, as first claimed.

Powell highlighted that the action was allegedly linked to pressure over interest rate decisions. This statement made many traders stop and think. It raised new questions about how interest rates were decided in the past and how they may be decided in the future.

Powell’s Statement and Why the Crypto Market Cares

Jerome Powell explained that the Federal Reserve is meant to act independently. This means it should set interest rates based only on economic data. These include inflation, jobs, and growth in the economy.

He said interest rate decisions should not be shaped by political demands. According to Powell, the legal pressure came after the Fed refused to change rates based on political wishes.

For the crypto market, this matters because prices depend heavily on trust. Traders need to believe that money decisions are made fairly and clearly. When this trust weakens, people trade less and become careful.

Crypto prices often react early when this kind of uncertainty appears. Even small doubts around money policy can slow buying activity.

Past Rate Cuts are Being Looked at Again

During 2025, the Federal Reserve cut interest rates three times. Inflation was easing at that time, so the cuts seemed reasonable. Markets accepted them as normal economic decisions.

After Powell’s disclosure, traders started reviewing those cuts more closely. The concern is not about whether cutting rates was right or wrong. The concern is whether outside pressure played any role.

When markets start asking these questions, behavior changes. Traders avoid large positions and wait for clearer signals. This can keep prices moving sideways instead of rising.

This shift is visible in current rate expectations. On Polymarket, the chance of a January 2026 rate cut has dropped to around 4%. This suggests traders believe rate cuts will be harder to justify going forward. For the crypto market, fewer rate cuts usually mean tighter money conditions.

How Gold and Bitcoin Reflect Confidence in Policy Decisions

Gold investors also reacted to Powell’s statement. Peter Schiff said the comments help explain why gold prices remain strong.

His view is simple. When people feel unsure about how money decisions are made, they prefer assets that do not depend on government policy. Gold has filled that role for many years.

The crypto market watches the same signal. Bitcoin often moves when confidence in financial rules changes. When trust is low, traders hesitate. When trust returns, activity improves. This does not mean prices will fall immediately. It means markets become sensitive to new information.

Right now, the crypto market is watching interest rate decisions closely. Traders want to see whether future moves are clearly based on economic data.

Powell’s statement made this question more important than before. Until there is more clarity, crypto prices may stay cautious. The issue is not only where rates go next, but who is truly making the decision.