Make no mistake: this is a significant summit — for the economy, for the stock market, and for Bitcoin.
Two key themes have emerged. The first is whether he will hint at imminent cuts to interest rates, and the second centers on the Fed’s independence.
His past addresses have had the power to move markets. While Powell has long adopted a “wait and see” approach to slashing the cost of borrowing — arguing that more economic data is needed to make an informed decision — there is growing confidence that rates will fall when policymakers meet in September. We won’t just get a short-term view during Powell’s speech, but a longer-term forecast too.
The latest figures from the CME FedWatch tool indicate there’s a 79.2% chance of a 25 basis point cut next month, with 20.8% anticipating rates will stay the same. Lower interest rates could prove beneficial for Bitcoin, and prompt investors to seek greater returns from riskier assets.
Meanwhile, the Fed chair has had to contend with repeated attacks from Donald Trump, who has taken to calling him “Too Late” Jerome Powell. The president has long been frustrated at the central bank’s reluctance to drastically cut interest rates — especially considering it increases the cost of government borrowing. Just this week, he also called for another Fed governor, Lisa Cook, to resign.
The Federal Reserve operates independently, but there are growing signs that the Trump administration wants greater control of its key functions. As Activtrade’s Carolane de Palmas told Cryptonews in an interview, this unsettles the markets, but could boost Bitcoin given its status as a “non-sovereign asset that operates outside of the influence of any government or central bank.”
Zooming out, another challenge dominating 2025 relates to the weakening dollar, with the greenback’s declines widely linked to Donald Trump’s controversial tariffs. Last month, eToro research suggested that investors are beginning to take action as a result — rotating out of U.S. stocks and into gold and cryptoassets.
We managed to get a glimpse into the Fed’s thinking when minutes from their July meeting were publicly released on Wednesday. It showed that most policymakers continue to believe that it isn’t the right time to cut interest rates, not least because inflation remains stubbornly high.
However, there was a significant development, with two governors — Michelle Bowman and Christopher Waller — voting against the decision to hold rates and calling for a cut instead. This is the first time something like this has happened in more than 30 years.
