Crypto Markets Show Mixed Signals Following Rate Cuts and Powell’s Keynote

Crypto's rollercoaster response to Fed moves proves digital assets still dance to traditional finance's tune—just with more volatility.

Market Pulse: Divergent Reactions

Major cryptocurrencies swung wildly as Powell's speech hit the wires. Bitcoin initially jumped 3% on rate cut hints, then gave back gains when hawkish undertones emerged. Altcoins followed suit—Ethereum flipped between green and red while memecoins went completely erratic.

Traders scrambled to interpret every pause and inflection in Powell's delivery. The usual suspects—liquidity conditions, risk appetite, institutional flows—all got thrown into the blender. Result? A classic crypto moment of collective confusion masked as sophisticated analysis.

Because nothing says 'decentralized future' like hanging on every word from a central banker. The revolution will be monetized—and thoroughly correlated with traditional markets.

Powell’s FOMC Speech

The FOMC just announced its decision to cut US interest rates, a highly-telegraphed MOVE with substantial market implications. Jerome Powell, Chair of the Federal Reserve, gave a speech to help explain this moderate decision.

In his speech, Powell discussed several negative economic factors in the US right now, including dour Jobs Reports and inflation concerns. These contribute to a degree of fiscal uncertainty which led Powell to stick with his conservative instincts, leaving tools available for future action.

“At today’s meeting, the Committee decided to lower the target range…by a quarter percentage point… and to continue reducing the size of our balance sheet. Changes to government policies continue to evolve, and their impacts on the economy remain uncertain,” he claimed.

Crypto’s Muted Response

The Fed is in a delicate position, balancing the concerns of inflation and employment. This conservative approach may help explain why crypto markets did not react much to Powell’s speech:

Bitcoin, alongside the other leading cryptoassets, exhibited similar movements during the rate cuts and Powell’s speech. Although there were brief price spikes immediately after the announcement, subsequent drops ate these gains.

BTC, ETH, XRP, DOGE, ADA, and more all fell more than 1% since the Fed’s announcement.

Breaking with Precedent

However, Powell’s speech did differ from his previous statements in one key respect: he directly addressed claims that President TRUMP is attacking the Fed’s neutrality. Although Powell skirted around this issue at Jackson Hole, various journalists repeatedly asked him about these developments.

After all, Trump strenuously tried to fire one Fed Governor, and the last-minute appointment of a new one yesterday was highly unusual. This new FOMC member was the sole dissenting vote on today’s policy change, agitating for higher rate cuts.

Powell, for his part, firmly and publicly disagreed with Miran’s position on speedier rate cuts. Moreover, though, he affirmed that the Fed bases its decisions solely on the economic data, not partisan considerations. Still, based on the severity of this pressure, this argument might not hold.

To sum it up, Powell’s speech touched on a lot of economic concerns, many of which are quite uncertain. The crypto market’s chaotic and 24-hour price cycles operate on a completely different set of considerations, and it priced these cuts in weeks ago.

Still, these valuation drops are a little ominous. Considering that markets anticipated crypto to rally during Powell’s speech, it may be bearish that token prices are falling across the board.