Nomura Withdraws Its December Rate Cut Expectation

In its updated projection, Nomura stated that it now expects the FED to keep interest rates unchanged during the December policy meeting. The institution had previously forecasted another 25 basis point cut, but Powell’s hawkish tone and the “wait-and-see” stance adopted by several FOMC members prompted a reassessment.

According to Nomura, upcoming economic data could still display mildly dovish trends, but the overall weakness may not be strong enough to reignite concerns over a deteriorating labor market. This view reflects a cautious sentiment that the FED may prefer to pause rate cuts temporarily rather than risk over-stimulating the economy.

Powell’s Hawkish Stance Shakes Market Confidence

During his post-meeting remarks, Powell noted that several committee members were in favor of taking a step back after two consecutive rate cuts, signaling a possible pause in the easing cycle. His statement — “A December rate cut is not guaranteed” — dampened market expectations and disappointed investors who had priced in another cut before the end of the year.

According to data from the Chicago Mercantile Exchange (CME) FedWatch Tool, there is now a 70.4% probability that the FED will hold rates steady in the 3.75%–4.00% range at the December FOMC meeting, while markets are even pricing a 29.6% chance of a rate hike.

Nomura’s Long-Term View: Rate Cuts Expected in 2026

Despite the near-term revision, Nomura maintained its longer-term forecast for monetary easing. The bank expects three 25 basis point rate cuts in 2026, specifically in March, June, and September, signaling that the next easing cycle may be more gradual and data-driven.

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Bitcoin Fall: Long Positions Face Heavy Liquidations

Early in the week, selling pressure dragged BTC price down to $110,950. This move hit traders who had opened highly leveraged long positions, forcing them into losses.

According to data, a total of $840 million worth of positions were liquidated within 24 hours. Of this amount, $675.81 million came from longs, while $263.92 million were from short trades.

Reversal After Powell’s Speech

Last Friday, a dovish speech from Fed Chair Jerome Powell briefly lifted Bitcoin, sparking a rally. However, a major whale took advantage of the move to sell, causing the price to reverse sharply. As a result, Bitcoin has now fallen 11% from its August 14 all-time high of $124,500.

Key Levels to Watch

The latest liquidation heatmap shows strong buy orders clustered between $110,500 – $109,700, with additional interest stretching down to $108,000.

Analyst Jelle noted that Bitcoin needs to hold above its monthly open at $111,900 to avoid a deeper pullback. Failure to do so could push BTC back into its previous trading range, opening the door for another retest of the $100K level.

“Bitcoin is still wiping out leveraged traders at range lows, and the sharks don’t look satisfied yet,” Jelle warned, urging caution in the short term.

This content does not constitute investment advice. The cryptocurrency market carries significant risks, and you should always conduct your own research before making trading decisions.

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What Powell Said About Labor Market and Risk Balance

Powell noted that labor supply has weakened in line with demand, while employment growth has sharply slowed near balance levels. He added that shifts in the risk balance may require policy adjustments. According to Powell, downside risks in the labor market are rising, and the overall economic balance is being closely monitored.

Inflation and Tariffs

Recent data shows that 12-month PCE inflation increased by 2.6% in July, with core inflation rising 2.9%. Powell emphasized the slowdown in consumer spending and the impact of tariffs on prices. A reasonable scenario assumes that tariff-related inflation effects will be temporary. However, while persistent inflation pressure is possible, labor market risks likely limit it.

Powell stressed that a one-time rise in price levels cannot be allowed to become a sustained inflation problem.

Is Powell Preparing for a Rate Cut

Following Powell’s remarks, the market is now pricing a 91.3% probability of a Fed rate cut in September, up from 75% prior to the speech. Investors continue to fully price in the possibility of two rate cuts by the end of the year.

Impact on Crypto Markets: Bitcoin and Ethereum Rising!

Before Powell’s speech, Bitcoin traded around $112,500, but during the speech it surged to $115,600. Ethereum also climbed to $4,600. This movement highlights how the Fed’s policy stance and dovish signals can influence crypto assets.

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