Fed’s Cautious Stance May Temper Crypto Bull Run as September Rate Cut Odds Drop to 40%

Federal Reserve Chair Jerome Powell's noncommittal stance on interest rate cuts has reshaped market expectations, with traders now pricing just a 40% chance of a September easing. The central bank held rates steady at 4.25%-4.5%, citing persistent economic uncertainties that continue to cloud the outlook.

Powell's remarks during Wednesday's press conference revealed no predetermined path, emphasizing data dependency over the coming months. "We have made no decisions about September," Powell stated, noting emerging inflationary pressures from tariffs that could complicate policy decisions.

Comerica Bank's Bill Adams warned that steady unemployment coupled with tariff-driven price increases might eliminate the case for near-term rate relief. The cautious approach comes despite political pressure, with the Fed maintaining its 2% inflation target as current readings hover at 2.7%.

Market analysts suggest the delayed monetary easing could decelerate the cryptocurrency market's upward trajectory. Digital assets, which typically thrive in low-rate environments, may face headwinds as investors recalibrate expectations for liquidity conditions.