XRP News Today: A Fed Governor's Push for Rate Cuts Sparks Crypto Market Shift

Federal Reserve Governor Christopher Waller, a leading contender for the Fed chair position, has called for the initiation of a rate-cutting cycle at the central bank's upcoming meeting on Sept. 17–18, with the possibility of multiple reductions in the following months. Waller emphasized the need for the Fed to remain agile, noting that the labor market can deteriorate quickly and that the central bank should respond accordingly. "We don't have to go into a lock sequence of steps," he stated in an interview on CNBC’s Squawk Box, adding that the Fed should assess conditions dynamically.

Waller's advocacy marks a shift from the July FOMC decision, which he and one other governor dissented from when the committee chose to keep the federal funds rate unchanged within the range of 4.25%–4.5%. This was the first time in over 30 years that two governors opposed a rate decision. He argues that the current interest rate is between 1.0 and 1.5 percentage points above the "neutral" level, suggesting room for several cuts over the next six months. "I would say over the next three or six months, we could see multiple cuts coming in," he said.

The potential for rate cuts has sparked optimism in the cryptocurrency market. Market indicators such as the CME FedWatch tool suggest a 97.6% probability of a 25-basis-point rate cut in September. This expectation has influenced investor behavior, particularly in the altcoin space, where the total market capitalization excluding Bitcoin is now above $1.5 trillion. The Bitcoin dominance metric has dropped below 60%, indicating a potential shift in investor capital toward altcoins. Analysts have attributed this to the expectation of easier monetary policy, which typically favors high-risk, high-growth assets like cryptocurrencies.

The impact of Fed policy on digital assets is further underscored by historical trends. Cryptocurrencies have historically exhibited an inverse relationship with U.S. interest rates and the dollar. Lower rates reduce the appeal of U.S. Treasuries and other low-yielding safe assets, shifting investor attention to riskier assets like Bitcoin and XRP. Additionally, easier monetary conditions can boost liquidity in financial markets, encouraging investment in innovative technologies such as blockchain and digital payment systems.

However, some analysts caution against overreacting to the anticipated rate cut. Economic data, including the core PCE inflation indicator at 2.9% and a 3.3% GDP growth rate, suggests a resilient economy. Critics argue that cutting rates now risks undermining the Fed’s credibility in managing inflation and could exacerbate financial instability. The debate reflects a broader tension between maintaining monetary discipline and responding to market pressures. Waller has reiterated the importance of preserving the Fed’s independence, stating that appointed officials will act in an apolitical manner regardless of leadership changes.

Market participants remain divided on the long-term implications of the Fed’s policy decisions. While a September rate cut could provide a near-term boost to cryptocurrencies, the sustainability of the gains will depend on broader economic developments, including inflation trends and labor market performance. Investors are advised to closely monitor key economic releases, such as the August PPI and nonfarm payroll data, which could shape the Fed’s policy trajectory in the coming months.

Source:

[1] Waller, in the running for chair, says Fed should cut in September (https://www.cnbc.com/2025/09/03/waller-in-the-running-for-chair-says-fed-should-cut-in-september.html)

[2] Altcoin season is loading as US Federal rate cut bets fuel market rotation (https://www.mitrade.com/insights/news/live-news/article-6-1094435-20250904)

[3] Could an Interest Rate Cut From the Fed Help or Hurt XRP? (https://www.aol.com/could-interest-rate-cut-fed-091500007.html)

[4] Here's Why a Fed Rate Cut Could be Great News for XRP (https://finance.yahoo.com/news/heres-why-fed-rate-cut-094500210.html)

[5] Fed Rate Cuts: Why Experts Say 99% of Traders Are Wrong (https://beincrypto.com/experts-warn-against-fed-rate-cuts/)