In his speech, Jerome Powell stated that the recent 0.50% interest rate cut should not be seen as a sign that future moves will be equally aggressive. Instead, the upcoming cuts will be smaller, and decisions will be made based on the data.
Powell also mentioned that if the economy continues as expected, future rate cuts will likely be in smaller increments of 0.25%. He confirmed that two more rate cuts could happen this year, but they won’t be as aggressive as the market had anticipated, which expected faster and larger cuts.
He emphasized that the labor market is still strong but managing inflation remains crucial. In August, inflation stood at 2.2%, which is close to the Fed’s 2% target, but core inflation is still at 2.7%, which is higher.
As for the crypto market, Powell’s speech doesn’t provide a clear signal of an immediate dump or pump, as he didn’t signal aggressive rate cuts that could make the market bullish. However, much depends on upcoming economic data. In June, a similar hawkish tone from the Fed led to a market dump, and if Powell’s cautious approach continues, we could see a further drop in BTC prices.
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