Breaking: Bitcoin, Ethereum Climb As Jerome Powell Affirms Fed Rate Cuts

US Federal Reserve Chair Jerome Powell gave the strongest Fed rate cuts signal in his Jackson Hole speech on Friday. After the FOMC Minutes release recently, Powell saying ‘The time has come for policy to adjust’ has further increased positive sentiment in the stock and crypto market today. Both Bitcoin and Ethereum witnessed a sharp upside move.

Bitcoin price hit an intraday high of $62,320 after the dovish comments signaled potential rate cuts starting in September. Ethereum price also hit $2700, but the upside lived momentarily and the price dropped back to $2,680.

Jerome Powell Gives Strongest Fed Rate Cuts Signal

During the Jackson Hole Symposium, Wyoming, US Federal Reserve Chair Jerome Powell said the central bank is looking for interest rate cuts ahead. While he didn’t provide exact indications on the timing or extent of rate cuts, Powell confirmed it’s time for a monetary policy pivot amid slowing inflation and weakening of the labor market in the United States.

“We do not seek or welcome further cooling in labor market conditions,” Powell said in prepared remarks for a speech at the central bank’s annual gathering in the Grand Teton National Park on Friday. “The time has come for policy to adjust.”

As expected, the Fed Chair stated that the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks. However, this confirmed expectations of a rate cut in September, triggering rallies for stocks and bonds, and Bitcoin.

CME FedWatch tool shows a 67.5% probability of 25 bps rate cut in September, down from 76% a day ago. Regardless, the market expects 100 bps rate cuts by the Fed this year. US Treasury yields and the US dollar index (DXY) fell 14-month low, which is bullish for Bitcoin.

Chair Jerome Powell said the time has come for the Fed to cut its key policy rate, affirming expectations that officials will begin lowering borrowing costs next month https://t.co/Bhm8B0zr5n pic.twitter.com/14Lsgdetaj

— Bloomberg TV (@BloombergTV) August 23, 2024

Bitcoin And Ethereum Performance

Analysts at Bank of America Securities recently noted that the S&P 500 has a limited historical reaction to the Jackson Hole meeting. Thus, even if Jerome Powell takes a dovish stance, it may not have much impact on the market.

Analyst Benjamin Cowen revealed ETH/BTC price action in 2016, 2020, and 2024. In 2016 and 2019, ETH rallied in September and topped out on September 20 and September 19, respectively. He thinks prices will drop after the Fed will cut rates to start rally later.

Bitcoin witnessed volatility as traders adjusted positions. BTC price is up 2% in an hour and nearly 3% in the past 24 hours, with the price currently trading at $61,700. The trading volume has also increased in the last hour, indicating a rise in interest among traders.

ETH price also climbed over 2% in the past 24 hours, with the price currently trading at $2,666. The 24-hour low and high are 2,592 and 2,700, respectively. Moreover, the trading volume witnessed a slight increase.