Powell's speech time confirmed, Federal Reserve FOMC decision triggers market turbulence

At the end of January, a key Federal Reserve meeting drew the attention of investors worldwide. Powell’s speech time was prominently marked on the market calendar because this speech was widely seen as a crucial turning point for the start of the year’s trend in cryptocurrencies and risk assets. According to market expectations at the time, the probability of the federal funds rate remaining in the 3.50%-3.75% range was very high, but the real focus was on Powell’s wording during the press conference.

Review of Decision Time and Key Points of the Speech

The Federal Open Market Committee (FOMC) meeting took place in Washington from January 27 to 28, with Powell’s speech scheduled around 3 a.m. Beijing time on January 29. During this highly anticipated speech, Powell faced numerous questions from the market about the Fed’s policy direction. The market sentiment was complex—CME FedWatch indicated less than a 5% chance of rate cuts, meaning investors had largely given up on short-term rate reductions and were instead speculating whether the Fed would maintain current policies or take other measures.

Rare Internal Disagreement at the Fed Raises Market Attention

The reason this decision attracted such high market attention was due to a rare split within the Fed. In the previous meeting, three members voted against the majority—one advocating for a significant 50 basis point cut, while the other two preferred to keep rates unchanged. This disagreement directly reflected differing views on the current economic situation. As a result, Powell’s speech became the best window for the market to interpret the consensus within the committee.

The macro environment at the time was complex and volatile. Sticky inflation persisted (PCE around 2.8%), the labor market showed signs of cooling but had not collapsed, and political pressure from the White House on the Fed continued. Powell had recently publicly countered events like judicial subpoenas, emphasizing the Fed’s independence, which heightened market expectations for his subsequent remarks—investors wanted to know how an independent Fed would weigh these complex factors.

How the Speech Content Affects Risk Asset Trends

The importance of Powell’s speech timing lies in how his wording can directly influence market expectations. If the speech leans hawkish (emphasizing inflation concerns and not rushing to cut rates), the dollar may strengthen, and risk assets like Bitcoin could face short-term pressure. Conversely, if a dovish signal is conveyed (focusing more on employment and hinting at future policy flexibility), it could boost risk appetite.

Historical experience shows that a dovish statement from the Fed chair can often ignite bullish market sentiment, while ambiguous or hawkish stances tend to cause larger volatility. Before the meeting, Bitcoin hovered between $85,000 and $90,000, while safe-haven assets like gold and silver remained strong. This contrast reflected the market’s anticipation of the Fed’s future direction.

From Expectations to Reality: Actual Market Reaction of BTC

After Powell’s speech, the market experienced a correction. Data shows Bitcoin gradually retreated from the previous range of $85,000-$90,000, and the latest figures indicate BTC has fallen to around $70,550. This change reflects the market’s digestion of the speech content—regardless of Powell’s wording, the market ultimately chose to short-term avoid risk assets.

This also reminds investors that Fed policy signals are not the sole driver of the market. Global economic conditions, other central bank policies, geopolitical factors, and more all influence the current market landscape. Bitcoin’s pullback from highs to around $70,000 reflects both a reassessment of the Fed’s hawkish stance and a phase of risk appetite retreat.

Highly leveraged traders should exercise extra caution around such policy announcements, as speeches often increase volatility. Setting reasonable stop-loss levels is crucial to protect capital. Regardless of the policy direction, Powell’s speech marks an important opportunity to gauge the tone of monetary policy, and its subsequent impact will gradually become evident in the market—investors should continue to monitor and analyze these developments.