Bitcoin rises 1.1% as Powell signals Fed policy adjustment

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Fed Chairman Jerome Powell’s speech in Jackson Hole today bolstered expectations for a rate cut in September, saying “the time has come for Fed policy to adjust.” This fueled a Bitcoin (BTC) run towards $62,000 after a 1.1% rise in the last hour.

Ethereum (ETH) and Solana (SOL) followed with gains of 0.8% and 1.1% respectively. Powell’s dovish stance was further indicated by the fact that the Fed is confident that inflation will reach 2%.

Moreover, the Fed chairman said that he is not looking for further cooling of the labor market and that they will do everything to support a strong movement in the labor market.

In particular, Powell’s remarks support the content of the Fed’s recently released minutes from the Federal Open Market Committee’s (FOMC) meeting in July. The paper suggests a 25 basis point (bps) cut in US interest rates is likely in September.

In addition, the minute also reinforced a speech by Powell in late July about a change in monetary policy if the date continues to come as expected. Consecutive aligned speech provides a sense of security to risk asset investors.

Users of the Polygon Polymarket prediction market are even more bullish on the Fed chairman’s latest words as the odds of a 50bps rate cut have increased. from 18% to 22% moments after his appearance at Jackson Hole. Additionally, the 50bps discount bet has the largest amount of funds allocated in the survey, exceeding $1.9 million.

According to Bitfinex analysts, Polymarket users are not wrong to expect a more aggressive rate cut. In an insight shared with Crypto Briefing, they explained that the jobs data mentioned by Powell raised the possibility of a more aggressive 50 bps cut.

“If Powell leans toward acknowledging the weakening of the labor market, markets could respond positively to the expectation of a rate cut, leading to a potential increase in risk assets like Bitcoin,” Bitfinex analysts added.

Earlier this week, Bitcoin price fell despite the Bank of England’s rate cut and dovish signals from the Federal Reserve, which forecast a potential rate cut in September.

Recently, Bitcoin fluctuated between $59,900 and $61,000 after convenient Federal Open Market Committee minutes hinted at a likely rate cut in September, pushing its current price to $62,000.

In July, Bitcoin rose to $59,100 as US inflation rates unexpectedly fell, fueling anticipation of a Federal Reserve rate cut in September.

Last month, Jerome Powell was expected to prepare for a 25 basis point interest rate cut at the Federal Reserve’s September meeting, indicating a cautious approach to future rate adjustments amid a traditionally stable market, although Bitcoin had problems.

In May, Bitcoin rose to $59,300 following the Federal Reserve’s decision to keep interest rates on hold, supported by Fed Chairman Jerome Powell’s reference to persistently high inflation.

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