Bitcoin Steadies Above $118K Despite Fed’s Hawkish Pause and Tariff Fears

Bitcoin (BTC) is showing resilience as it climbs back above $118,000 on Thursday after a brief dip following the US Federal Reserve’s decision to hold interest rates steady. While Fed Chair Jerome Powell’s hawkish tone raised concerns over inflation driven by new tariffs, crypto markets appear to be holding firm.

Fed Holds Rates, Powell Flags Inflation Risk from Tariffs

As widely expected, the Federal Open Market Committee (FOMC) left its benchmark rate unchanged at 4.25% to 4.50% for the fifth straight meeting. However, Fed Chair Jerome Powell struck a hawkish tone, emphasizing inflation concerns stemming from President Trump’s latest round of tariffs — including 25% on India, 15% on Japan and the EU, and 30% on China.

“Increased tariffs are pushing up prices,” Powell said, warning of potential inflationary consequences. Still, the Fed opted not to hike, signaling a cautious stance while monitoring the evolving trade situation.

Bitcoin Rebounds as Market Digests Fed Comments

BTC briefly dropped below $116,000 following Powell’s comments but quickly regained ground. As of writing, Bitcoin is trading near $118,000, up 0.50% on the day. Altcoins are also recovering: Ethereum (ETH) is up over 1%, while Ripple (XRP) and Solana (SOL) are each posting 2% gains.

Despite the volatility, sentiment remains optimistic. The Crypto Fear and Greed Index currently stands at 62, firmly in the “greed” zone — suggesting investors are still risk-on despite Powell’s remarks.

Outlook: Inflation Risks vs. Crypto Strength

If inflation accelerates due to global tariffs, it may pressure the Fed to tighten policy, potentially curbing demand for risk assets like crypto. For now, however, markets are betting on stability, with Bitcoin and altcoins showing strength in the face of macro uncertainty.

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