In his final keynote address at Jackson Hole, Fed Chair Jerome Powell seemed open to lowering interest rates. He talked on several ongoing fiscal problems and policy approaches to fix them.
Powell did not make any firm commitments and took great pains to describe the complicated situation. Still, his firm stance might be cracking, which could be bullish for crypto.
Jerome Powell’s Speech
Fed Chair Jerome Powell’s speech at Jackson Hole has been hotly anticipated, as it may trigger big price moves for Bitcoin. Even if President Trump cannot replace him, his term will end next May. Therefore, this is almost certainly his last Jackson Hole speech.
In other words, if he was ever going to change his firm resistance to interest rate cuts, now would be the time. Billions in crypto options are set to expire today, and the US Treasury has been buying back debt. A lot is currently hinging on Jerome Powell’s speech, and he highlighted some ongoing problems:
“This year, the economy has faced new challenges. There is a significant uncertainty about where these policies will eventually settle, and what the lasting impact will be. While the labor market appears to be in balance, it is a curious kind of balance,” he claimed.
Jerome Powell hammered on the impact of Trump’s tariffs, weak US jobs data, rising inflation rates, and more. He referred to several situations where the economic outlook could continue deteriorating, and seemed to hint at a possible rate cut:
“What are the implications for monetary policy? Our policy rate is now 100 bps closer to neutral than it was a year ago. The instability of the labor market and our unemployment rate now allows us to proceed carefully as we consider changes to our policy stance. The shifting balance of risks may require us to change our policy stance,” Powell claimed.
Still, Jerome Powell didn’t make any firm commitments. He described a few hypothetical scenarios where rate cuts would be urgent, but didn’t suggest that we’re quite there yet. For now, the hope of imminent future cuts is all the markets can hope for. No promises.
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