Haciyev Reşit 
The Chairman of the U.S. Federal Reserve (Fed), Jerome Powell, signaled a cautious shift in monetary policy in a speech as he enters the final months of his term.
Powell’s remarks were interpreted by financial markets as a sign of a potential interest rate cut in September. This development triggered strong fluctuations across global markets, particularly in cryptocurrencies.
Rate Cut Expectations Rise Sharply
In recent weeks, Polymarket data showed the probability of a September rate cut at around 35%. However, following Powell’s comments and positive reports on the U.S. economy, this figure has surged to as high as 80%.
Despite this, the higher-than-expected Producer Price Index (PPI) data released last week put some pressure on expectations, pushing the probability of a rate cut down to 57% before Powell’s speech. While Powell did not give a specific date, the possibility of a policy pivot at the September FOMC meeting remains in the spotlight for investors.
Immediate Reaction in Crypto Markets
Following Powell’s speech, crypto assets reacted swiftly:
- Bitcoin (BTC): Jumped from $112,000 to above $117,000 before experiencing a mild correction.
- Ethereum (ETH): Broke its all-time high (ATH) with a strong rally.
- Binance Coin (BNB): Joined the rally and surged to new record levels.
Ethereum’s outperformance compared to Bitcoin stood out in particular.
More Upside Potential for ETH
Marcin Kazmierczak, co-founder of RedStone, noted that Powell’s cautious tone has introduced a new dynamic into crypto markets:
“Powell opened the door for rate cuts but emphasized they won’t rush into aggressive easing. This measured approach creates an interesting opportunity for risk assets like Ethereum.”
According to Kazmierczak, if the Fed initiates a gradual easing cycle, Ethereum could surpass the $4,800–$5,000 range and set fresh highs. However, he stressed that not only monetary policy expectations but also strong fundamental adoption would be required to sustain this momentum.
September FOMC Meeting Ahead
Attention now turns to the Fed’s September meeting. The guidance Powell provides there will be critical for both crypto markets and global finance.
According to Polymarket data, markets are currently pricing in a 78% chance of a 25 basis point rate cut. If that materializes, Bitcoin may strengthen its foothold above $120,000, while Ethereum could be poised to unlock new all-time highs.
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