Bitcoin

Powell Signals September Fed Rate Cut, Bitcoin Surges

Federal Reserve Chair Jerome Powell hinted at a possible rate cut at the September FOMC meeting, and Bitcoin, along with other cryptocurrencies, jumped in response.

Speaking at the annual Jackson Hole conference in Wyoming on Friday, Powell pointed to rising risks in the labor market and inflation concerns as reasons for the potential move.

He further explained that downside risks to employment are increasing and that recent job numbers show the labor market is weaker than expected. He said, “Labor supply has softened in line with demand,” and noted that recent nonfarm payroll data indicated slower job growth. 

July jobs increased by only 73,000, falling short of the 147,000 expected, while May and June numbers were revised down from 144,000 and 147,000 to 19,000 and 14,000, respectively. “We can no longer ignore the downside risks to employment,” Powell added, signaling that the Fed may act to support the economy.

Furthermore, he also addressed inflation pressures from tariffs implemented during the Trump administration. He mentioned that these tariffs are pushing prices higher but that the effects might be temporary. 

“The effects of tariffs on consumer prices are now clearly visible,” Powell said, while noting the high uncertainty about timing and amounts. He warned about stagflation but emphasized that the Fed is closely monitoring the situation.

Following the speech, Bitcoin rose from about $112,000 to over $116,000, and other cryptocurrencies also went up. US stocks moved higher too, with the Dow reaching a new record of 45,548, climbing more than 600 points.

BTC Price action | Source: Tradingview

According to CME FedWatch data, the odds of a 25 basis point cut in September have risen to 87.3%, reflecting the market’s confidence in Powell’s signal.

Powell also announced changes to the Fed’s operating framework, returning to flexible inflation targeting and removing the 2020 “makeup strategy.” He said, “Our revised statement emphasizes our commitment to act forcefully to ensure that longer-term inflation expectations remain well-anchored.” This reflects the Fed’s cautious approach to balancing inflation risks with economic growth.

The Jackson Hole speech gave markets a clear signal, and both cryptocurrencies and stocks rose as traders reacted to the news.

Also Read: Verb Technology Buys $713M Toncoin to Boost TON Treasury

Richard Ogunjobi

Richard Ogunjobi is a well-experienced crypto journalist who has covered topics that cut across several topics and niches. Richard has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover, and loving traveling.

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