Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole event has captured investor attention, as his comments on interest rates impact Bitcoin and Ethereum prices.
Powell’s hawkish stance could deter anticipated rate cuts, causing Bitcoin’s drop below $117,000 and stalling Ethereum’s rally near $4,460 due to liquidity fears.
The upcoming Federal Reserve gathering, with Jerome Powell as its central figure, is under scrutiny. Market participants are anticipating Powell’s position on rate cuts, directly influencing Bitcoin (BTC) and Ethereum’s (ETH) price movements.
Powell has repeatedly stressed the importance of inflation control over rapid rate cuts. Alongside him, Governor Michelle Bowman has noted concerns regarding the job market, advocating for a cautious, hawkish approach. “Federal Reserve Chair Jerome Powell pushes back against market expectations for 2025 rate cuts, emphasizing the need to keep inflation in check.” President Trump has also pressured for lower rates.
Bitcoin Drops from $124K Amid ETF Outflows
Spot Bitcoin ETF has seen net outflows, reflecting fading hopes for imminent rate cuts. Bitcoin experienced a drop from $124,000 to below $117,000. Ethereum’s rally remains stalled, exacerbated by liquidity tightening and ETF outflows.
Ed Yardeni, a market strategist, predicts Powell will maintain a watchful stance. “Odds are that [Powell] will be more of an owl—waiting and watching—than either a hawk or a dove. In other words, he’ll say that a Fed rate cut is possible at the September meeting, but the Fed’s decisions are data-dependent.” Bank of America’s analysts suggest Powell might use current data as leverage against potential cuts. Historical trends show hawkish Fed signals can dampen risk asset performance.
Aggressive Fed in 2022 Triggered Crypto Bear Markets
In 2022, similar aggressive Fed measures led to prolonged crypto bear markets. Assets like Bitcoin and governance tokens showed increased volatility. This historical precedent suggests current Fed signals will impact the crypto sector significantly.
Expert insights from Kanalcoin suggest potential sustained rate hikes could lead to heightened volatility in the crypto market. Data suggests the Fed’s macroeconomic policies often remain a dominant force on cryptocurrency price dynamics during such events.
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