Bitcoin surges after Fed chairman confirms rate cut

Jerome Powell, chairman of the US Federal Reserve, gave the strongest signal yet for Fed rate cuts in his speech at Jackson Hole. The highlight was a single sentence uttered in his speech on Friday (23): “the time has come for policy to adjust”, speaking about interest rates.

In other words, Powell hinted that the Fed should cut interest rates to align with falling inflation data. The speech resonated in the cryptocurrency market, with the price of Bitcoin (BTC) registering a 2% increase and operating above US$ 61,000 after this speech.

The price of Ethereum (ETH) also rose, rising 2.7% and approaching US$2,700.

Strong signal for interest rate cut

During the annual Jackson Hole Symposium, the Fed Chairman delivers the main speech of the event. In his speech, Jerome Powell said that the central bank already expects to cut interest rates in the future.

While he did not provide exact indications on the timing or extent of rate cuts, Powell confirmed that it is time for a change.

“We neither expect nor welcome any further cooling in labor market conditions. It is time for policy to adjust,” Powell said. With this statement, many analysts expect the rate cut to come as early as the next meeting, which will take place on September 18.

In this sense, Powell stated that the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks. According to the CME FedWatch tool, the market has started to see the chances of a 25 basis point rate cut: 65.5% expect rates to fall to the range of 5% to 5.25% in September.

Bitcoin and Ethereum Performance

Analysts at Bank of America Securities recently noted that the S&P 500 has historically had a limited reaction to the Jackson Hole meeting. So even if Powell were to adopt a cut stance, it might not have much of an impact on the market. And indeed, the stock index is up just 0.29% on Friday.

Meanwhile, Bitcoin witnessed volatility as traders adjusted their positions and surged 2% in an hour and nearly 3% in the past 24 hours, with the price currently trading at $61,700. Trading volume also increased in the past hour, indicating a surge in interest among traders.

The price of ETH has also surged by over 2% in the last 24 hours, with the price currently trading at $2,666. The 24-hour low and high are 2,592 and 2,700, respectively. Additionally, the trading volume witnessed a slight increase.

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