Bitcoin News Today: Deutsche Bank Upgrades Fed Rate-Cut Outlook to 25 BPS by September 2025 Following Powell’s Jackson Hole Speech

Deutsche Bank’s recent revision of its Federal Reserve rate-cut forecast has sent ripples across global financial markets, with investors recalibrating expectations for monetary policy easing. The bank now sees a 25-basis-point rate cut in September 2025 as increasingly likely, a shift from earlier, more cautious projections. This updated stance follows Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium, where his tone was described as more accommodative than anticipated, signaling openness to easing policy amid moderating inflation [1].

The market response has been swift and pronounced. Treasury yields have dropped, with traders now assigning an 89% probability to a September rate cut, as reflected in bond market pricing [2]. Equities have also shown a positive reaction, with U.S. indices like the Dow Jones rising on the back of renewed optimism. Deutsche Bank and Goldman Sachs both highlighted the importance of Powell’s comments, with the former explicitly adjusting its rate-cut outlook [3].

Bitcoin surged in response to the news, reaching as high as $117,000. The cryptocurrency’s 24-hour trading volume hit $81.32 billion, with a 38.24% increase, while its 24-hour price gain stood at 3.82%. Despite this short-term rally, Bitcoin recorded a 0.81% decline over the past week, illustrating the volatile nature of the market. Analysts from Coincu suggest that Fed easing historically boosts risk-on sentiment, potentially benefiting cryptocurrencies [4].

The Federal Reserve has kept its target federal funds rate steady in the 4.25% to 4.5% range, but Powell’s comments have signaled a potential shift. While political pressures have called for more aggressive cuts, the central bank has not committed to such a path. Instead, the market is now pricing in a more measured easing, especially as inflation appears to be cooling [5].

However, uncertainty remains. The Fed has emphasized that its decisions will be data-dependent, and a hawkish surprise could still emerge if inflation data fails to meet expectations [6]. For now, the renewed possibility of a rate cut has boosted investor sentiment, with markets reacting favorably to the prospect of monetary stimulus.

The broader market response has been mixed. The German DAX, for example, dipped slightly ahead of Powell’s speech as traders anticipated volatility. In contrast, U.S. indices have rallied, with the Dow Jones and others leading the charge [7].

Deutsche Bank’s updated forecast adds momentum to the market’s shift in expectations, reinforcing the idea that the Fed is becoming more open to easing policy. While the central bank has not yet confirmed a cut, the evolving narrative is influencing asset prices and investor behavior globally.

References:

[1] MSN, Powell Opens the Door to a September Rate Cut, https://www.msn.com/en-us/money/markets/powell-opens-the-door-to-a-september-rate-cut/ar-AA1L3aon?ocid=finance-verthp-feeds

[2] AOL.com, Stocks climb as investors bet on rate cut following Jerome ..., https://www.aol.com/stocks-climb-investors-bet-rate-173509694.html

[3] Proactive financial news, Dow Jones leads Wall Street higher as Powell signals ..., https://www.proactiveinvestors.com/companies/news/1077189/dow-jones-set-to-lead-wall-street-higher-as-investors-look-to-powell-s-jackson-hole-speech-1077189.html

[4] CoinMarketCap, Bitcoin Market Analysis, https://coinmarketcap.com/community/articles/68a8f9e97ccc5639478bf5cc/

[5] Investing.com, Fed's Powell opens door to potential rate cuts at Jackson ..., https://www.investing.com/news/stock-market-news/jerome-powell-speaking-at-jackson-hole-signals-a-september-rate-cut-4206874

[6] Moomoo, Jackson Hole Preview: Brace for a Potential Hawkish ..., https://www.moomoo.com/news/post/57309589/jackson-hole-preview-brace-for-a-potential-hawkish-surprise

[7] LinkedIn, Markets brace for Powell speech, https://www.linkedin.com/news/story/markets-brace-for-powell-speech-6512492/