On Wednesday, Bitcoin $BTC$71,271.36 fell below the $71,000 mark as Jerome Powell, the Chair of the Federal Reserve, highlighted escalating oil prices due to ongoing conflict in Iran as a potential new threat to inflation.
The Federal Reserve maintained its current interest rates as anticipated; however, during his press conference following the meeting, Powell noted that the recent spike in energy costs is already influencing the central bank’s projections.
“The impact of rising oil prices is certainly reflected,” he stated while expressing uncertainty about how long-lasting this effect might be.
Policymakers have adjusted their inflation forecast for 2026 from 2.4% to 2.7%, emphasizing worries that price pressures may persist longer than previously expected.
Nonetheless, Powell rejected any parallels to stagflation reminiscent of the 1970s despite increasing tensions between sluggish growth and persistent inflation facing the central bank.
“That’s not applicable at this moment,” he remarked, pointing out that unemployment rates are still close to historical averages while inflation remains only slightly above target levels. “I would reserve ‘stagflation’ for a much more severe situation.”
“What we are experiencing is some friction between our objectives; we are working through it,” he added.
Cautious markets
The markets were already under strain before receiving news from the Fed due to disappointing February inflation figures and no indication of de-escalation in Iran’s conflict; they declined further towards session’s end.
Bitcoin ($BTC) price on Wednesday after FOMC (CoinDesk)
By late Wednesday afternoon, Bitcoin $ BTC $71 ,271 .36 had dropped significantly back down to $70 ,900 , reflecting nearly a 5 % decrease over a 24-hour period. Ether (ETH) experienced an even steeper decline of about 6.5 % .
The S & P500 and Nasdaq indices closed at their lowest points for the day with declines of1 .4 % and1 .5 %, respectively.
Gold also saw its value fall below$4850 per ounce , marking a3 .1 % drop on what has been its weakest day in over a month.
Stocks associated with digital assets continued their downward trend alongside cryptocurrency values.
MicroStrategy (MSTR), which holds significant amounts of Bitcoin ($BTC), saw shares drop by approximately5 -6 %. Meanwhile Bitmine (BMNR), known for managing Ethereum treasuries also faced similar losses. Investment firm Galaxy Digital Holdings (GLXY) fell nearly7 %, whereas crypto exchange Gemini (GEMI) plummeted15 %, reaching one of its lowest points since going public last year.