- Jerome Powell, Chairman of the US Federal Reserve, signals a potential rate cut in September, contingent on inflation trends.
- Despite the announcement, major fluctuations in Bitcoin and other virtual currencies were absent, as market expectations had already been priced in.
In a recent statement, Jerome Powell, Chairman of the US Federal Reserve, hinted at the possibility of a rate cut as early as September, provided that the inflation target of 2% appears sustainably achievable. This comment followed the decision by the Federal Open Market Committee (FOMC) to keep the federal funds rate unchanged on July 31, maintaining the rate range at 5.25% to 5.50%.
Impact on Financial Markets
Despite this significant news from the central bank, cryptocurrencies like Bitcoin saw no immediate price changes, indicating that market participants had either made prior adjustments or had already priced in such expectations. This reflects the increasing maturity and stability of crypto markets, which now often react less volatilely to macroeconomic announcements.
The next FOMC meeting is scheduled for September 17-18, shortly after the high-profile economic symposium in Jackson Hole, which is also expected to provide significant insights into future monetary policy. According to the CME Group’s FedWatch Tool, there is an 87.5% probability of a 0.25-point cut.
Simultaneously, the Bank of Japan (BoJ) announced an increase in short-term interest rates to support and sustain its price stability target of 2%. This simultaneous monetary policy adjustment by two of the world’s leading central banks could have significant impacts on global financial and currency markets, particularly affecting the USD/JPY exchange rate, which in turn could influence the prices of virtual currencies denominated in yen.
These developments illustrate the complex interplays between central bank policies, real economic conditions, and digital asset markets. Investors and market observers should therefore closely monitor the upcoming economic forums and the resulting policy guidelines.