The post Fed Chair Powell’s ‘Time Has Come for Rate Cut’ Fuels Crypto Rally appeared first on Coinpedia Fintech News
Today, August 23, 2024, Federal Reserve Chair Jerome Powell’s speech at Kansas City has turned the overall cryptocurrency market green. Powell’s speech strongly indicates that interest-rate cuts are coming.
Powell’s Signal on Interest Rate Cuts
Following the speech, the overall cryptocurrency and US Stock markets have rallied significantly. In his speech, Powell stated, “The time has come for policy to adjust,” this potentially signals the Fed’s interest in rate cuts.
Additionally, Powell’s point of view clearly hints that there will be an interest rate cut in September, but the timing and the pace of the rate cut will depend on the upcoming data.
Currently, the overall market is expecting a significant 50 basis points (0.50%) rate cut in September. However, if the central bank only delivers a smaller 25 basis points (0.25%) cut instead, it could lead to a massive sell-off in the market.
Fed’s View on the Labor Market
In addition to the interest 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 looks like 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 make further progress toward price stability.
Additionally, regarding these rate-cut expectations, James Seyffart made a post on X (previously Twitter) that the Market aren’t pricing 50bps for September just yet.
Crypto Market Surge Post-Speech
Following Powell’s rate cut and labor market speech, the overall cryptocurrency market is up by 0.61%. Additionally, top assets including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) have experienced a price surge of over 2%, 3%, 1.5%, and 5%, respectively in just a few hours.
However, BTC is there at a crucial level, if it closes a daily candle above the $62,200 level there is a high possibility it could soar to $68,000 and $71,000 levels in the coming days.
