Powell’s Hawkish Stance Slams Crypto: September Rate Cut Odds Plunge to 43%

Jerome Powell just threw ice water on crypto's summer rally. The Fed chair's latest remarks sent September rate cut probabilities tumbling to 43% - and digital assets are feeling the chill.

Market Pulse: Crypto Brakes Hard

Traders yanked risk exposure faster than a DeFi rug pull. Bitcoin wobbled near key support levels as altcoins bled out double-digits. That 'soft landing' narrative? Looking increasingly like wishful thinking from Wall Street permabulls.

The Fed Effect: Not Your Friend

Central bankers continue playing whack-a-mole with market expectations. Powell's Jackson Hole speech contained exactly zero dovish crumbs - because why would the Fed rescue overleveraged crypto degens?

Silver lining? At least the SEC can't blame this selloff on 'lack of regulation.' Sometimes old-fashioned monetary policy does the job just fine.

Many crypto traders were hoping for a rate cut in September, but Federal Reserve Chair Jerome Powell’s latest comments have weakened those expectations. The chance of a cut has now dropped to just 43%.

Now that crypto prices are falling, many are asking: Is the bull run slowing down or just taking a short break?.

No Clear Decision on Rate Cuts Yet

During his recent press conference, Powell made it clear We remain highly attentive to inflation risks,” emphasizing a wait-and-see stance until the next FOMC meeting on September 17-18, 2025.

Fed’s biggest concern is the growing inflation, which ROSE to 2.7% year-over-year in June, with the Consumer Price Index (CPI) rising 0.3% month-over-month, surpassing the Fed’s 2% target.

Simultaneously, unemployment has held steady at 4.2%, leaving little room for the Fed to justify a cut unless economic conditions deteriorate further.

Interestingly, two Fed members supported a rate cut this time, which hasn’t happened in decades. That could be a sign that pressure is building inside the Fed for a shift soon.

Sept Rate Cut Odds Fall To 43%

Before the press conference, there was a 63% chance of a September rate cut. But after Powell’s speech, that number dropped to 43% according to the CME Fed watch tool. 

Traditionally, lower interest rates usually boost crypto by pushing investors toward riskier assets like Bitcoin. A delay in rate cuts may slow crypto’s growth, but it won’t likely cause a major drop.

Still, others argue that as long as liquidity stays high, the crypto market won’t suffer much. 

Crypto Faces Bearish Months Ahead

Adding uncertainty is the beginning of the most bearish month of the calendar. As Bitcoin is heading into its two weakest months, August and September. Over the past 12 years, it dropped in 8 out of 12 Augusts and two-thirds of Septembers. On average, it drops by 8.6% and 4.6% during this month, respectively. 

Right now, bitcoin is stuck between $116,000 and $119,000, showing no clear direction.

With slow price action and no strong boost from the Fed yet, the crypto market may stay quiet for now.