Fed ends 2020 inflation policy on August 22, 2025, signaling a return to pre-2020 strategies and tighter interest-rate posture. This pivot may increase short-term market volatility and reshape investor allocations, with cryptocurrencies likely to react to changing rate expectations and liquidity conditions.
Fed abandons the 2020 flexible average inflation targeting framework, announced at Jackson Hole on August 22, 2025.
Markets saw broad equity rallies while analysts warn of potential crypto volatility as interest-rate sensitivity rises.
Historical precedent: major Fed policy shifts have preceded double-digit intraday moves in BTC and ETH in some episodes, highlighting elevated risk.
Fed ends 2020 inflation policy: immediate market implications for crypto and stocks. Read analysis and strategy steps for investors and traders. Updated Aug 22, 2025.
By COINOTAG — Published: 2025-08-22 · Updated: 2025-08-22
What does the Fed ending the 2020 inflation policy mean for markets?
Fed ends 2020 inflation policy describes the Federal Reserve’s decision to withdraw the flexible average inflation targeting framework introduced in 2020 and revert to a more traditional, pre-2020 policy posture. The move prioritizes tighter inflation control and raises the prospect of sustained higher interest-rate management across asset classes.
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The Jackson Hole pivot increases the likelihood of greater short-term volatility in cryptocurrency markets as investors reprice rate expectations and liquidity conditions. Historically, major changes to U.S. monetary policy have preceded sharper swings in Bitcoin and Ethereum, altering risk-premia and institutional allocation decisions.
Jerome H. Powell emphasized the Fed’s updated strategy during his Jackson Hole remarks: “Over the course of this year, the U.S. economy has shown resilience… I will then turn to the results of our second public review of our monetary policy framework, as captured in the revised Statement on Longer-Run Goals and Monetary Policy Strategy that we released today.”
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Source: https://en.coinotag.com/fed-ends-2020-inflation-policy-at-jackson-hole-bitcoin-may-face-volatility-as-stocks-rally/