For years, cryptocurrency investors have become thoroughly accustomed to hearing from Jerome Powell, but the chairman’s tenure is coming to an end. This week, Powell will deliver his final remarks following the Fed’s rate decision, after which Kevin Warsh will take the helm on May 15. Powell’s final commentary and his assessment of the economic impact of the Iran conflict will be highly significant ahead of this leadership transition.
Potential impact of April 29 rate decision
According to the FedWatch tool, there is a 100% probability that interest rates will remain unchanged at the upcoming meeting—a level of certainty not seen in a long time. This session is crucial for both equities and cryptocurrencies, and attention will center on the tone Fed officials set. Should the Fed strike a more confident stance on inflation, or address growth concerns in a relatively dovish manner, markets are likely to respond positively.
On the other hand, if the Fed hints that inflation will remain above target for longer, or signals diminished urgency for easing monetary policy, risk assets may come under pressure. A few weeks ago, the president of the New York Fed, essentially the Fed’s number two, stated that “with migration policies and other steps by Trump,” unemployment is increasingly being brought under control. This implies the Fed could put greater emphasis on its inflation mandate. Now, with geopolitical tensions escalating, Powell may adopt such a stance in his final address.
Expert outlook on rate policy
Deutsche Bank does not anticipate any change to rates at April’s FOMC meeting and believes policy remains well-positioned to manage present risks. The primary focus will be on how Powell calibrates the balance of risks in his speech. If Powell maintains a balanced tone, the consensus is that the Fed will likely wait until at least June before making any significant adjustments.
Wells Fargo analysts, citing persistent PCE inflation near 3%, do not expect rate cuts over the next few meetings. They expect a message of flexibility and elaborated as follows:
Wells Fargo analysts anticipate that “the Fed will acknowledge higher energy costs and soften its forward guidance by adopting more open-ended language on future moves. Powell is expected to highlight uncertainty stemming from the Iran conflict and reiterate that the Committee stands ready to adjust policy as needed, emphasizing that the current stance is appropriate while awaiting further data.”
Market watchers predict a total of 50 basis points in rate cuts by September and December, provided that tensions over Iran subside and Warsh solidifies his new role.
For BTC, the critical support levels in a downturn are $75,727 and $73,855. If these thresholds are maintained and the Fed avoids a destructive policy signal, sustained closes above $78,738 could set the stage for a test of $80,203. Confirmation of a true reversal, however, would require closes above $82,000.
Crypto investors are watching closely as this Fed meeting could signal a changing approach toward inflation and policy risks, a decision that also coincides with a period of heightened global uncertainty.
While no rate cut is currently expected, the markets are sensitive to any shift in messaging that might hint at either a sooner or later pivot. Global events, combined with a changing Fed leadership, are fueling speculation across all risk markets.
The outcome of this week’s meeting is likely to dictate the near-term direction for both US equities and cryptocurrency markets. Investors are bracing for volatility, seeking guidance from Powell’s last statements as chair.
Ultimately, Kevin Warsh’s arrival in mid-May marks a new chapter for the Fed, and analysts anticipate that his approach to balancing inflation and growth objectives will be closely scrutinized.
With inflation persistently near the Fed’s target and a global backdrop of geopolitical stress, all eyes are on the central bank’s evolving policy narrative and its ripple effects on BTC and other major assets.
