Today, August 23, 2024, Federal Reserve Chairman Jerome Powell’s speech in Kansas City turned the overall cryptocurrency market green. Powell’s speech strongly suggests that rate cuts are coming.
Powell’s signal on rate cuts
After the speech, the broader cryptocurrency and US stock markets rallied significantly. In his speech, Powell said, “The time has come for policy to adjust,” possibly signaling the Fed’s interest in rate cuts.
Furthermore, Powell’s position clearly indicates that there will be a rate cut in September, but the timing and pace of the rate cut depends on upcoming data.
Currently, the overall market is expecting a significant rate cut of 50 basis points (0.50%) in September. However, if the central bank only implements a smaller cut of 25 basis points (0.25%), it could lead to a massive market sell-off.
Fed’s view on the labor market
In addition to the rate cut, he also warned that the labor market is a bigger concern for the economy than inflationary pressures. This indicates that inflation is important and can be controlled, but the current labor market seems to be a bigger threat to the economy.
However, Powell assured that the Fed would do everything it could to support a strong labor market as we move further along the path to price stability.
Additionally, James Seyffart posted on X (formerly Twitter) regarding rate cut expectations, indicating that the market is not yet pricing in 50bps for September.
Crypto Market Rises After Speech
Following Powell’s rate cut and labor market speech, the overall cryptocurrency market is up 0.61%. Moreover, top assets such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) have seen price increases of over 2%, 3%, 1.5%, and 5% respectively in just a few hours.
However, BTC is at a crucial level. If the daily candle closes above the $62,200 level, there is a high chance that the price will climb towards $68,000 and $71,000 in the coming days.
