Economic authorities mull over reducing interest rates due to a detected decline in job market dynamics
The Federal Reserve is widely expected to cut interest rates in September 2025, according to traders and economists. The Fed kept rates unchanged at 4.25%-4.50% in its latest meeting, but signs of moderated economic growth and revised language suggest a likely cut.
Goldman Sachs forecasts a 25-basis-point cut in September, followed by additional cuts later in 2025 and 2026. UBS also expects Fed policy easing to resume in September, potentially cutting rates by 100 basis points over 12 months. However, Fed Chair Powell has refrained from endorsing expectations, emphasizing the need to see more data before the September meeting.
A Fed rate cut typically lowers borrowing costs, stimulates economic activity, and tends to boost equity prices. Fixed income investors might adjust portfolios towards lower-duration, higher-quality bonds anticipating easier monetary policy. For cryptocurrencies, easier monetary policy often supports prices by reducing the opportunity cost of holding non-yielding assets and by increasing liquidity. Thus, a September rate cut could lead to upward price pressure on cryptocurrencies.
However, it's important to note that crypto markets remain sensitive to broader risk sentiment and regulatory developments beyond Fed policy. The US July employment data release and other economic indicators will influence crypto market trends.
In other financial news, Gate US officially launched to offer secure and compliant crypto trading to U.S. customers. Meanwhile, Strategy's potential 1.5 million Bitcoin acquisition has raised headlines, but further details are yet to be disclosed.
References: - [1] "US-EU Trade Deal Spurs USD Strength and Gold Rally". Finance Feeds. (Date unknown) - [2] "Tariffs and Fed Rate Cut Expectations Stir Crypto Volatility". CoinDesk. (Date unknown) - [3] "Wall Street Quietly Increases Crypto Exposure, Says Tom Lee". Bloomberg. (Date unknown)
- In the realm of cryptocurrency, a Fed rate cut could lead to increased liquidity and price support for altcoins and cryptocurrencies, such as Bitcoin.
- As for crypto trading, the launch of Gate US provides a secure and compliant platform for U.S. customers to engage in trading activities.
- Meanwhile, the potential acquisition of 1.5 million Bitcoins by Strategy has generated headlines, yet details regarding this transaction remain vague, potentially influencing crypto news and market trends.
