Powell Signals Possible September Rate Cut; Bitcoin Rises 2%
Federal Reserve Chair Jerome Powell indicated a potential September rate cut during his speech at the Kansas City Fed's Economic Symposium. Key points include:
- Powell noted rising downside risks to employment, which could lead to increased layoffs and unemployment.
- Following his remarks, Bitcoin rose approximately 2% to $114,200.
- U.S. stocks gained over 1%, while the 10-year Treasury yield decreased by six basis points to 4.27%.
- The dollar index fell about 0.5%, and gold increased by 0.6%.
Prior to the speech, markets expected a hawkish tone from Powell, causing pressure on risk assets, including cryptocurrencies. Bitcoin had dropped nearly 10% from its record high above $124,000 before rebounding after Powell's comments. The odds for a rate cut increased from approximately 69% to nearly 90% post-speech.
- Ether declined about 12% during this period but bounced back nearly 8% following the speech.
- The Nasdaq fell 3% in anticipation of reduced chances for a rate cut.