Bitcoin fell below $71,000 on Wednesday as Federal Reserve Chairman Jerome Powell flagged rising oil prices amid the war in Iran as a new inflation risk.
The Fed kept interest rates steady as expected, but during his post-meeting press conference, Powell acknowledged that the recent rise in energy prices is already weighing on the central bank’s outlook.
“The oil shock is definitely showing up” in higher inflation projections, he said, while cautioning that “nobody knows” yet how persistent the impact will be.
Policymakers raised their 2026 inflation forecast to 2.7% from 2.4%, underscoring concerns that price pressures could remain high longer than expected.
Despite that, Powell rejected comparisons to 1970s-style stagflation, even as the central bank faces growing tensions between slowing growth and sticky inflation.
“That’s not the case right now,” he said, noting that unemployment remains close to long-term norms while inflation is only modestly above target. “I would reserve the term stagflation for a much more serious set of circumstances.”
“What we have is some tension between the goals and we are trying to work through that,” he added.
Cautious markets
Already under pressure ahead of Fed news of poor inflation data for February and no sign that the war in Iran is letting up, markets fell further late in the session.
Bitcoin by late Wednesday afternoon had pulled all the way back to $70,900, down nearly 5% over the past 24 hours. Ether (ETH) was down 6.5%.
The S&P 500 and Nasdaq closed at their lowest levels of the day, down 1.4% and 1.5%, respectively. Gold extended its slide to below $4,850 an ounce, now 3.1% lower on the day at its weakest price in more than a month.
Digital asset-related stocks remained significantly lower following crypto prices. Strategy (MSTR), the largest corporate BTC holder, and Bitmine (BMNR), the leading Ethereum tax company, were 5%-6% lower. Investment company Galaxy ( GLXY ) fell nearly 7%, while crypto exchange Gemini ( GEMI ) fell 15% to around its lowest level since it went public last year.
