Federal Reserve Signals Rate Cut Amid Stabilized Inflation

Institutional analysts confirmed the U.S. core CPI stayed at 3.1% in August 2025, steadying market expectations for a Federal Reserve rate cut next week.

This stability supports a likely rate cut, easing U.S. Treasury yields and potentially boosting cryptocurrency and risk assets’ performance.

Fed’s Potential Rate Cut and Market Sentiments

Institutional analysts indicated a slight increase in the overall CPI rate, but with the core CPI stable at 3.1%, suggesting minimal change in core inflation. The slight increase in housing and food costs was anticipated and aligns with analyst forecasts.

Expectations for a rate cut have been fueled by the latest data, with a market consensus nearly fixed on a 25bps reduction. Institutional market players predict lower funding costs and more relaxed asset volatility in upcoming quarters, aligning with predictions for several cuts by year-end.

“The annual core CPI rate remains a key focus in our policy decisions.” — Jerome Powell, Chairman, Federal Reserve

Market reactions have been largely positive. U.S. Treasury yields fell, reflecting relief. In the cryptocurrency domain, Arthur Hayes and Raoul Pal share optimism about the positive outlook for digital assets following this monetary easing.

Crypto Market Response to Fed Policy and Historical Patterns

Did you know? The last Federal Reserve rate cut in 2023 corresponded with a bullish surge in Ethereum prices, demonstrating historical trends in risk assets reacting positively to monetary easing.

Ethereum’s current price of $4,416.58 marks a 2.00% increase over the last twenty-four hours, reflecting a positive shift. With a trading volume of $37.28 billion, Ethereum maintains a market dominance of 13.45%. Data provided by CoinMarketCap.

The Coincu research team advises that monetary easing can potentially boost crypto markets, as seen in recent cycles. Market stability fosters favorable conditions for risk assets. Future regulatory clarity remains a pivotal factor in long-term growth and investor confidence.