Ethereum News Today: BlackRock Backs 50-Basis-Point Fed Rate Cut as Market Odds Near 90%

Investors are increasingly positioning for a potential Federal Reserve rate cut in September, with BlackRock Research suggesting there is a rational basis for a 50-basis-point reduction. This recommendation contrasts with the current market expectation of a 25-basis-point cut. The firm’s outlook has contributed to a gradual shift in market expectations for easing, particularly after the release of July inflation data, which has pushed the probability of a rate cut to nearly 90%[1]. Rick Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, noted that while recent inflation numbers were slightly higher than previous months, they remain below levels that would prevent the Fed from cutting rates in September[1].

This growing optimism is evident in financial instruments tied to the secured overnight financing rate (SOFR), where traders have added approximately $2 million to positions that would benefit from a larger-than-expected rate reduction[1]. The increasing appetite for aggressive easing stands in contrast to the Fed’s public messaging, creating a divergence between market sentiment and official guidance. While BlackRock advocates for a more substantial cut, other analysts, such as Marco Santarelli of Norada Real Estate, believe a 25-basis-point reduction is more likely[2]. This divergence highlights the uncertainty surrounding the Fed’s upcoming decision.

A 50-basis-point cut could have significant implications for financial markets, particularly for risk assets like cryptocurrencies. Ethereum has already experienced a rally, with its price reaching $4,400, driven by soft U.S. inflation data and rising institutional demand for ETH ETFs[3]. The broader cryptocurrency market has also seen improved risk sentiment, influenced by trade policy developments and expectations of Fed easing[4]. A larger-than-expected cut would likely lower borrowing costs and stimulate economic activity, potentially boosting the performance of certain ETFs and other risk assets.

With the Federal Open Market Committee meeting in September approaching, investors are closely watching key economic indicators for further signals. If the Fed acts in line with BlackRock’s expectations, it could signal the start of a broader easing cycle, with potential implications for global capital flows and asset valuations.

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[1] BlackRock Research: The Fed is Expected to Begin Cutting Rates in September, with a Rational Basis for a 50 Basis Point Cut (https://www.theblockbeats.info/en/flash/307117)

[2] Norada Real Estate. (2025, August 12). About Marco Santarelli (https://www.noradarealestate.com/blog/author/marco-santarelli/)

[3] FastBull. (2025, July 29). Ethereum Price Hits $4400 on CPI Data And Surging... (https://www.fastbull.com/news-detail/ethereum-price-hits-4400-on-cpi-data-and-4339330_0)

[4] AInvest. (2025, July 30). Bitcoin Surges 3% to $120000 on U.S. Policy Shift (https://www.ainvest.com/news/bitcoin-surges-3-120-000-policy-shift-2508/)