Bitcoin slipped below the $95,000 mark on Monday as geopolitical tensions resurfaced following President Donald Trump’s renewed tariff rhetoric. His call to maintain sweeping duties on Chinese imports sparked risk-off sentiment across financial markets, dampening momentum in both crypto and equities ahead of this week’s Federal Reserve rate decision.
The leading cryptocurrency, which started the weekend trading above $96,000, lost nearly 1.8% over the past 24 hours. Altcoins took an even sharper hit: XRP fell 2.7% to $2.12, and Solana dipped just under 1% to around $146. The pullback reflects mounting anxiety among traders who are weighing the dual impact of potential trade disruptions and monetary policy uncertainty.
The spotlight now shifts to the Federal Reserve’s midweek policy meeting. According to CME’s FedWatch tool, there’s a 97% probability the Fed will keep its benchmark interest rate unchanged at 4.25%–4.5%, marking its third consecutive pause. However, any hawkish commentary—particularly around future rate hikes or delayed cuts—could stir fresh volatility in already fragile markets.
All Eyes on Powell as Fed Balances Growth and Inflation Risks
As traders await the Federal Reserve’s latest policy statement, speculation is building around whether Chair Jerome Powell will adjust his rhetoric in response to Trump’s escalating trade threats. While the president continues to push for rate cuts, the Fed has remained restrained, opting to hold rates steady while assessing the economic toll of shifting trade dynamics and their inflationary implications.
Some analysts believe Powell could subtly shift the Fed’s focus toward growth concerns. If the chair emphasizes signs of economic slowdown over inflation risks, it may lay the groundwork for a more accommodative stance later this year. Bitwise strategist Juan Leon said that markets are likely to interpret even nuanced language as dovish under current conditions.
“I think they’re trying to mirror Trump by holding their cards as close [to their chests] as they can,” Leon explained.
“Because of that, I think investors are going to be reading into whatever statements Powell puts out.”
Still, the Fed could maintain strategic ambiguity—echoing its cautious tone from previous trade standoffs during Trump’s first term. By avoiding definitive guidance, Powell keeps optionality open, allowing the Fed to adjust on the fly if trade policy volatility intensifies. That kind of positioning may prolong investor uncertainty, but it offers flexibility in an unpredictable election year.
Fed’s Projections and Trump’s Cinema Tariff Surprise Add to Market Jitters
This week’s meeting carries added significance as the Fed is also expected to release its quarterly economic projections. These updates will offer insight into policymakers’ evolving outlook for growth, inflation, and rate adjustments through the end of 2025. In December, the central bank signaled expectations for two 25-basis-point cuts this year—a downgrade from the four cuts initially anticipated. Whether those projections hold firm will be key to investor sentiment.
Adding to the tension is Trump’s latest tariff declaration. On Sunday, the president proposed a 100% duty on foreign films in an unexpected post on Truth Social, arguing that the measure is necessary to support the struggling U.S. movie industry. While analysts view the cinema tariff threat as mostly symbolic, it contributes to a broader climate of policy unpredictability.
Markets, particularly those driven by risk-sensitive capital like crypto, remain highly reactive to such moves. The resurfacing of Trump’s aggressive trade playbook, combined with fresh Fed projections, sets the stage for elevated volatility across digital and traditional asset classes in the days ahead.
Quick Facts
- Bitcoin fell below $95,000 following renewed tariff threats from President Trump, including a proposed 100% duty on foreign films.
- Altcoins also dropped, with XRP down 2.7% and Solana falling nearly 1%.
- The Fed is expected to hold rates steady but will issue updated economic forecasts during this week’s meeting.
- Investor attention is focused on whether Powell signals a policy shift amid rising trade and inflation uncertainties.
