Bitcoin fell below $71,000 on Wednesday as Federal Reserve Chairman Jerome Powell flagged rising oil prices amid the Iran war as a new inflation risk.
The Fed kept interest rates steady as expected, but at his post-meeting news conference, Powell acknowledged that the recent surge in energy prices was already fueling the central bank’s outlook.
“The oil shock certainly shows up” in higher inflation projections, he said, while cautioning that “no one knows” yet how persistent the impact will be.
Policymakers raised their inflation forecasts for 2026 from 2.4% to 2.7%, highlighting concerns that price pressures could remain elevated for longer than expected.
Even so, Powell rejected comparisons to 1970s-style stagflation, even as the central bank faces growing tension between slowing growth and persistent inflation.
“This is not the case currently,” he said, pointing out that unemployment remains close to long-term norms while inflation is only slightly above target. “I would reserve the term stagflation for much more serious circumstances.”
“We have some tension between the objectives, and we are trying to get out of it,” he added.
Cautious markets
Already under pressure before the Fed’s announcement of poor inflation figures in February and no sign of an end to the war in Iran, the markets fell further at the end of the session.
Bitcoin By late Wednesday afternoon, it was back to $70,900, down nearly 5% in the past 24 hours. Ether (ETH) was down 6.5%.
The S&P 500 and Nasdaq closed at the day’s lows, down 1.4% and 1.5%, respectively. Gold extended its decline below $4,850 an ounce, now down 3.1% on the day, to its lowest price in more than a month.
Stocks linked to digital assets remained sharply lower, following cryptocurrency prices. Strategy (MSTR), the largest BTC holding company, and Bitmine (BMNR), the leading Ethereum treasury company, were down 5-6%. Investment firm Galaxy (GLXY) fell nearly 7%, while crypto exchange Gemini (GEMI) fell 15% to its lowest level since its IPO last year.
