Powell Signals More Rate Cuts Ahead — Bitcoin Surges in Response

The financial world is buzzing once again — Federal Reserve Chair Jerome Powell has hinted that the Fed is preparing for another interest rate cut, as the U.S. labor market continues to weaken. While economists weigh the implications for inflation, Bitcoin (BTC) has emerged as an immediate winner, rallying strongly on Powell’s dovish tone.

Powell Turns Dovish: Fed Eyes Labor Market Risks Speaking at the National Association for Business Economics (NABE) annual meeting, Powell noted that the economic outlook for employment and inflation hasn’t changed significantly since the September FOMC meeting.

However, he emphasized the rising risks in the labor market, signaling that the central bank may move ahead with another rate cut at its upcoming October meeting. “The downside risks to employment have clearly increased,” Powell stated, suggesting that the Fed remains in a supportive stance — even at the cost of a weaker U.S. dollar.

Bitcoin Breaks Above $112,000 Markets reacted instantly to Powell’s remarks.

Bitcoin surged from a daily low of $110,000 to $112,800, marking a sharp rebound after several days of weakness.

According to TradingView data, the cryptocurrency has once again bounced as investors bet that lower rates will boost liquidity and risk assets. Earlier this month, BTC even reached a new all-time high above $126,000, fueled by speculation that the Fed would deliver a rate cut in October.

Markets Balance Between Inflation and Liquidity The Fed already delivered its first rate cut last month, responding to a cooling labor market. Now, it appears ready to continue easing.

For cryptocurrencies — which often thrive in expansionary monetary environments — this could signal another wave of gains, especially if global liquidity begins to rise again. Still, Powell cautioned that the Fed will proceed carefully, ensuring inflation remains under control before committing to an extended period of low rates.

Fed May End Balance Sheet Runoff — A Sign of Policy Shift One of the biggest surprises in Powell’s speech was his statement that the Fed could soon stop reducing its balance sheet, effectively ending the phase of quantitative tightening.

According to Powell, the central bank is “approaching a point where it will be appropriate to halt the runoff,” a signal that markets interpreted as a shift toward easing. Such a move would likely lift overall market sentiment — not only for cryptocurrencies but also for equities and gold.

In Summary Powell’s dovish tone sent a clear message:

➡️ The Fed is ready to cut rates further.

➡️ Employment risks now outweigh inflation fears.

➡️ Bitcoin reacted instantly, surging higher. All signs point toward another rate cut on the horizon, as investors prepare for a new era of cheap money — one where Bitcoin could once again shine as digital gold.

#Powell , #FederalReserve , #interestrates , #Fed , #CryptoMarket

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