Bitcoin News Today: Bitcoin Dips as Powell’s Stance Tests Market Patience

Federal Reserve Chair Jerome Powell is set to deliver a pivotal speech at the Jackson Hole economic symposium, an event that has historically signaled significant policy shifts and is expected to carry substantial weight for financial markets. Investors and analysts are closely watching for any hints of the Fed’s next move on interest rates, with a 74.4% probability of a 25 basis point cut expected in September, according to the CME Group’s FedWatch tool. However, this expectation has cooled from earlier projections, as mixed economic data has tempered market sentiment.

In the run-up to the speech, the release of July Federal Open Market Committee (FOMC) minutes showed a majority of officials emphasizing the risk of inflation over employment concerns, with many expressing caution about the effects of President Donald Trump’s tariffs on price stability. This hawkish tone has already impacted the crypto market, with prices retreating after a modest rebound. Bitcoin, for example, fell from a 0.7% gain to just barely positive over the last 24 hours, trading at around $113,300, while ether slipped from a 4.5% gain to a 2.3% increase.

The July meeting also revealed that several Fed officials saw no immediate need for a rate cut, with Cleveland Fed President Beth Hammack stating that the data did not support the case for a September easing. Hammack noted that inflation remains too high and is still rising, and that the full impact of Trump’s tariffs on inflation could not be assessed until next year. These comments reflect broader concerns among policymakers that while some inflationary pressures are easing, others—such as core services and producer prices—suggest that inflation could be more persistent than expected.

Powell is expected to continue the Fed’s wait-and-see approach, which has been a consistent stance amid the dual mandate of maximizing employment and minimizing inflation. The speech will also likely address the Fed’s long-term policy goals, with analysts expecting a reevaluation of the 2020 framework that allowed inflation to run hot if unemployment was high. Deutsche Bank’s chief U.S. economist, Matthew Luzzetti, anticipates that Powell may signal a return to a more preemptive approach to inflation, which could influence the broader economic strategy moving forward.

The political landscape further complicates the Fed’s decision-making. President Trump has consistently pressured the central bank to lower rates, while also targeting Fed officials with criticism over policy and administrative decisions. Powell has largely resisted these pressures, emphasizing the Fed’s independence and its commitment to data-driven policy. However, the recent controversy over the Bureau of Labor Statistics’ employment data has added uncertainty, with some policymakers calling for more time to assess the true state of the labor market before making a decision.

Cryptocurrency markets, particularly bitcoin and ether, are expected to react strongly to Powell’s remarks. A hawkish stance could deepen the current sell-off, potentially leading to a 30% correction if markets shift to a risk-off mode. Conversely, any dovish surprises could spark a short-term rally. Analysts note that the crypto market has historically experienced volatility during this period due to the halving cycle, but the current pullback is also influenced by broader macroeconomic factors, including U.S. inflation data and Trump’s potential policy moves.

The Jackson Hole symposium remains a key event for shaping market expectations. In past years, Powell has used the platform to indicate significant policy changes, and this year is no different. While the central bank is unlikely to provide a definitive signal on the September rate cut, the speech will aim to provide a broader framing of the Fed’s policy direction. Investors will be particularly focused on how Powell characterizes the labor market and the inflation outlook, as these factors will determine the trajectory of monetary policy in the coming months.

Source:

[1] Federal Reserve, Jerome Powell, Jackson Hole Speech (https://www.cbsnews.com/news/federal-reserve-jerome-powell-jackson-hole-speech-friday-trump-inflation/)

[2] Powell to deliver Jackson Hole speech Friday. What Wall Street expects (https://www.cnbc.com/2025/08/21/powell-to-deliver-jackson-hole-speech-friday-what-wall-street-expects.html)

[3] Hawkish FOMC Minutes Knocks Legs Out of Crypto Bounce (https://www.coindesk.com/markets/2025/08/20/hawkish-fomc-minutes-knocks-legs-out-of-crypto-bounce)

[4] Bitcoin holds near $113000 ahead of Jackson Hole as markets await Powell (https://www.theblock.co/post/367896/bitcoin-steady-jerome-powell-jackson-hole)

[5] Fed's Hammack Says 'No' to Rate Cut; Bitcoin Slips to Session Low Below USD113k (https://www.coindesk.com/markets/2025/08/21/fed-s-hammack-says-no-to-rate-cut-bitcoin-slips-to-session-low-below-usd113k)