Bitcoin News Today: Treasury Secretary Bessent Backs 50 BPS Fed Rate Cut in September Amid Mixed Inflation Data

Treasury Secretary Scott Bessent has advocated for a 50 basis point cut in the Federal Reserve’s interest rate during the September meeting, a significant shift from the Fed’s previously hawkish stance [1]. This call comes amid mixed inflation data that showed the July consumer price index (CPI) rose 0.2% monthly and 2.7% annually, slightly below the 2.8% forecast. However, core CPI, which excludes volatile food and energy components, rose 3.1% yearly, exceeding expectations [1].

The White House Press Secretary Karoline Leavitt underscored that inflation “beat market expectations once again and remains stable,” noting small business optimism at five-month highs and tariff revenues contributing to economic resilience [1]. Despite the headline CPI figure, critics argue the true inflation rate may be higher due to outdated consumption basket metrics, with one analyst estimating a real inflation rate of 1.83% [1].

Bessent’s remarks signal a growing push for monetary easing, with market odds for a September rate cut surging above 96% from 80% after the inflation report [1]. Traders now price in three potential Fed rate cuts before year-end, as the S&P 500 reached a record high and the U.S. dollar weakened, creating favorable conditions for crypto markets [1]. Alexandra Wilson-Elizondo from Goldman Sachs Asset Management noted the Fed is receiving “data support that the tariff effect on price level will mostly be transitory,” as companies continue to absorb costs through inventory adjustments [1].

The political landscape has intensified, with President Donald Trump escalating criticism against Fed Chair Jerome Powell, accusing him of causing “trillions of dollars in interest costs” and considering legal action over what he described as “a horrible and grossly incompetent job” [1]. Trump also insisted tariffs have not caused inflation and accused Goldman Sachs of failing to “give credit where credit is due” [1]. Powell, in contrast, previously indicated that interest rates could have declined sooner without the tariff agenda, leading to accusations of “politically motivated monetary policy” from market participants [1].

The call for a rate cut contrasts sharply with earlier Fed communications, where Powell had effectively ruled out a September cut during the July meeting, triggering a brief dip in Bitcoin below $116,000 before recovery [1]. Now, with the global crypto market cap above $3.8 trillion and the Fear and Greed Index at 63, cryptocurrency markets show resilience amid the broader macroeconomic uncertainty [1]. The dollar’s weakness supports emerging markets and dollar-denominated commodities, with Brazil, Chile, and Indonesia among the beneficiaries of lower borrowing costs and currency stability [1].

Bitcoin ETFs now hold $155 billion in assets, and Ethereum ETFs manage $27 billion, suggesting continued institutional adoption despite temporary inflow slowdowns. Analysts remain cautiously optimistic, with Ray Youssef from NoOnes noting that while Fed and political market stirs may cause “macro tremors,” the broader bullish structure remains intact [1]. However, Bloomberg Intelligence analyst Mike McGlone warned that Bitcoin may be approaching a “sell when they’re yelling” extreme, citing gold’s outperformance as a potential indicator of speculative asset weakness [1].

The Fed’s policy environment remains complex, with core inflation 110 basis points above its 2% target, yet imported goods inflation remains lower than feared as companies absorb tariff costs [1]. This duality supports the case for monetary accommodation despite elevated core readings, particularly as the Treasury seeks to confirm Trump’s nominee for Powell’s successor in time for the September meeting [1].

Sources:

[1] [Treasury Secretary Bessent Calls for 50 BPS Fed Rate Cut in September – Crypto Bulls See More Upside](https://cryptonews.com/news/treasury-secretary-bessent-calls-for-50-bps-fed-rate-cut/)