The new Federal Reserve Chair Jerome Powell not only kept interest rates unchanged at his first FOMC meeting but also directly announced the abandonment of forward guidance. The market is fully priced in a 25 basis point rate hike by the end of the year, but Bitcoin initially dropped over 1% in the short term before rebounding above $66k — this is not simply a case of all negative news being priced in, but rather the market losing a familiar pricing anchor.

Powell explicitly stated that "no forward guidance can be provided regarding the next steps," and plans to conduct a comprehensive review of communication methods by the end of the year, including the dot plot and press conferences. The dot plot shows nine officials expect rate hikes by 2026, with only one expecting a cut, but Powell himself did not submit a forecast. This "de-guidance" forces the market to interpret economic data on its own rather than rely on central bank hints.
For the crypto market, traders have been accustomed over the past two years to a simple logic: "weak data → expectations of rate cuts → risk assets rise." Now Powell is cutting off this transmission chain, meaning Bitcoin's reaction to CPI, non-farm payrolls, and other data will become more nonlinear. Institutional funds may prefer to wait for actual interest rate changes rather than bet on expectations, potentially slowing ETF inflows.
The risk is that, without central bank expectation management, market volatility could increase. If inflation data exceeds expectations, rate hike expectations could quickly reinforce themselves, and Powell will not step in to soothe the market. Whether Bitcoin's support around $64k is solid depends on whether the market can price itself without the "Federal Reserve put options."
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