Fed rate cut has prompted a market repricing that lifts risk assets while creating short-term pressure in crypto markets; institutional inflows support Bitcoin despite weakness in the labor market, suggesting any correction may be short-lived if easing continues.
Fed rate cut increased probability of further easing, prompting mixed crypto price action
Bitcoin faced selling pressure even as ETF inflows signaled ongoing institutional demand
Bitcoin ETFs saw $977 million in inflows last week; total crypto inflows reached $1.9 billion (CoinShares)
Fed rate cut crypto impact: Bitcoin dips as labor market softens; ETF inflows persist. Expert analysis, data, and actionable implications for investors—read more.
Fed Chair Jerome Powell warned of labor market weakness after Fed’s first rate cut in nine months, as futures markets bet on more easing ahead.
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Fed Chair Jerome Powell reiterated the Federal Reserve’s balancing act, saying policymakers must weigh price stability against the employment mandate after last week’s 25 basis-point cut. Powell noted growth has moderated and highlighted higher near-term inflation alongside signs of weakening employment.
Powell said: “The unemployment rate is low but has edged up. Job gains have slowed, and the downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated.”
He also commented that clearer trade policy suggests tariffs may produce only a “one-time pass-through” to inflation, a softer view than earlier warnings that tariffs could sustain higher price pressure later in the year.
Vice Chair Michelle Bowman expressed similar concern at a separate event, noting the U.S. economy’s resilience but flagging a weakening labor market and softer growth. The Federal Open Market Committee (FOMC) voted to cut rates by 25 basis points — the first reduction in nine months — and markets now price additional easing later in the year.
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DBS Bank described the meeting as full of “dissonance and contradictions,” noting officials’ forecasts for faster GDP growth and lower unemployment while simultaneously acknowledging downside risks to jobs.
Fed rate cut is reshaping short-term risk pricing: it supports risk assets broadly but has triggered profit-taking in crypto. Institutional demand, however, remains robust—ETF flows and fund-level inflows indicate potential for a quick rebound if markets confirm a sustained easing cycle.
Bitcoin historically benefits from easier monetary policy as liquidity and risk appetite rise. Recent data show $977 million in Bitcoin ETF inflows last week and $1.9 billion in total crypto inflows ( CoinShares ), which supports prices even amid short-term corrections.
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