Crypto Market Soars on Dovish Stance as Powell Signals Rate Cuts

  • Jerome Powell said that interest rate reductions are in the works.
  • The market’s expectation is that the Fed will decrease interest rates by 100 bps this year.

The most powerful indication of Fed rate reduction came from US Federal Reserve Chair Jerome Powell during his Friday address in Jackson Hole. Following the recent publication of the FOMC Minutes, the stock and cryptocurrency markets were already in a bullish mood. But Powell’s statement that “The time has come for policy to adjust” further elevated it. A dramatic increase was seen by the prices of both Bitcoin and Ethereum.

Following the dovish remarks, which hinted at possible rate cuts beginning in September, the price of bitcoin reached an intraday high of $62,320. The price of Ethereum also reached $2700. But the gain was short-lived, as the price subsequently went back down to $2,680.

Rate Cut in September Highly Likely

Chair of the US Federal Reserve Jerome Powell said that interest rate reductions are in the works at the Jackson Hole Symposium in Wyoming. Powell acknowledged that a change in monetary policy is necessary in light of declining inflatio. And a weaker labor market, but he did not provide specifics about when or how much rates would be decreased.

As anticipated, the Chair of the Federal Reserve said that new data, the changing outlook, and the risk balance would determine the timing and amount of rate decreases. Stocks, bonds, and Bitcoin all rallied after this, as it reaffirmed predictions of a September rate decrease.

After being at 76% yesterday, the CME FedWatch tool now forecasts a 67.5% chance of a 25 bps rate drop in September. The market’s expectation is that the Fed will decrease interest rates by 100 basis points this year. The US dollar index (DXY) and US Treasury rates hit a 14-month low, which bodes well for Bitcoin.

Highlighted Crypto News Today:

Coinbase Enhances Stablecoin Offering with EURC Integration on Solana

Source: https://thenewscrypto.com/crypto-market-soars-on-dovish-stance-as-powell-signals-rate-cuts/