Bitcoin News Today: Fed Officials Signal Rate Cuts as Economy Slows and Crypto Markets React

The U.S. Federal Reserve is increasingly considering potential interest rate cuts as signs of a cooling economy become more pronounced. Minneapolis Fed President Neel Kashkari has been among the most vocal figures highlighting the need for policy adjustments, suggesting that two rate cuts by the end of the year could be appropriate amid a slowdown in economic growth. Kashkari’s recent statements have drawn attention from market observers and underscore growing unease among some Fed officials about the direction of the labor market and overall economic conditions [1][2][3].

Kashkari emphasized that while rate cuts could support economic growth, the Federal Reserve remains alert to potential inflationary pressures from tariffs. The statement underscores the importance of closely monitoring economic indicators like unemployment rates [4]. If data shows the economy slowing, a rate cut may become appropriate, but any fresh inflation—such as from new tariffs—could provoke a pause or raise [5].

The concerns raised by Kashkari align with broader economic signals, including recent weak employment data and a cooling labor market, which have led to calls for a more accommodative monetary stance. While Kashkari is not a voting member of the Federal Open Market Committee this year, his views reflect those of some dissenters who have argued against maintaining the current interest rate policy [6]. The debate over whether to cut rates or hold steady is expected to intensify as more data becomes available in the coming months.

Goldman Sachs has gone a step further, forecasting up to five rate cuts by mid-2026 if the current economic trajectory continues. This prediction is based on the firm’s assessment of weak employment trends and a broader economic slowdown that could pressure the Fed into action [7]. However, Kashkari has also noted that any rate cuts would depend on continued progress in bringing down inflation, which remains a key policy objective.

Market expectations have already begun to shift in response to Kashkari’s comments and similar statements from other Fed officials. The probability of a rate cut at the September meeting has increased, with investors and analysts closely watching for further guidance [8]. Kashkari has emphasized that while the path forward is uncertain, the Fed must remain prepared to respond to evolving economic conditions.

As the central bank weighs its next steps, the focus is likely to remain on balancing the risks of inflation with the need to support employment and economic growth. With Kashkari and others signaling a growing openness to rate cuts, the stage is set for a more active policy response in the near term [9][10].

The approach could also impact cryptocurrency markets, with crypto assets historically responding positively to dovish Federal Reserve pivots, affecting Bitcoin, Ethereum, and DeFi tokens [11]. Past Fed policies have influenced current crypto market trends, with the 2019–2020 rate cuts significantly boosting crypto rallies [12]. Bitcoin, trading at $114,571.19, has seen recent fluctuations and a 11.62% increase over the past 90 days, reflecting ongoing adjustments in response to Federal Reserve policies [13]. Coincu’s research suggests that if the Federal Reserve opts for monetary easing, cryptocurrencies may see sustained interest and investment flows from both retail and institutional players [14].

Sources:

[1] Fed policymakers signal rising angst about cooling economy – Reuters

https://www.reuters.com/business/fed-policymakers-signal-rising-angst-about-cooling-economy-2025-08-06/

[2] Fed signals potential interest rate cuts amid concerns over ... – Chosun

https://biz.chosun.com/en/en-international/2025/08/07/GX2NCOXIXZCH7EJITMSSLAYU7E/

[3] US Rate Cut Looms Amid Economic Slowdown – Sharecafe

https://www.sharecafe.com.au/2025/08/07/us-rate-cut-looms-amid-economic-slowdown/

[4] Federal Reserve Weighs Interest Rate Cuts as Economy ... – IndexBox

https://www.indexbox.io/blog/federal-reserve-considers-rate-cuts-amid-economic-slowdown/

[5] Minneapolis Fed Speeches

[6] Fed's Kashkari: Two rate cuts this year still seem appropriate. – FXStreet

https://www.fxstreet.com/news/feds-kashkari-two-rate-cuts-this-year-still-seem-appropriate-202508061310

[7] Fed Split Over Rate Cuts Widens, Goldman Predicts Five ... – Benzinga

https://www.benzinga.com/analyst-stock-ratings/analyst-color/25/08/46908946/fed-rate-cut-september-kashkari-goldman-outlook-2025

[8] Kashkari's statements ignite expectations A reduction in US ... – المتداول

https://www.arabictrader.com/en/news/economy/191261/kashkaris-statements-ignite-expectations-a-reduction-in-us-interest-rates-is-near

[9] Fed will have to respond to slowing economy ... – MSN

https://www.msn.com/en-us/money/markets/fed-will-have-to-respond-to-slowing-economy-fed-s-kashkari-says/ar-AA1K1gVq?ocid=finance-verthp-feeds

[10] Fed policymakers signal rising angst about cooling economy – Reuters

[11] Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 03:07 UTC on August 7, 2025

[12] Past Fed Policies Influence Current Crypto Market Trends – CoinMarketCap

https://coinmarketcap.com/community/articles/68941a2a8c46c77d2c1317d6/

[13] Past Fed Policies Influence Current Crypto Market Trends – CoinMarketCap

[14] Coincu’s research suggests that if the Federal Reserve opts for monetary easing, cryptocurrencies, particularly Bitcoin and Ethereum, might see sustained interest and investment flows from both retail and institutional players, aligning with broader historical trends favoring liquidity-driven asset rallies.