Crypto Rally Falters as Fed Rate Cut Uncertainty Looms Amid Treasury Rate Pressure

The cryptocurrency market's recent rally was abruptly halted by Friday's disappointing jobs report, casting doubt on the Federal Reserve's monetary policy trajectory. Investors now price in an 80% probability of a 25-basis-point rate cut in September, though structural economic forces continue to push borrowing costs higher.

Governor Adriana Kugler's unexpected resignation—effective August 8—creates a vacancy that could reshape the Fed's balance of power. The departure allows President TRUMP to appoint a potentially more dovish successor ahead of Jerome Powell's term expiration next May. Any new appointment may amplify internal dissent against the current stance of maintaining elevated rates.

This week's commentary from FOMC voters Collins, Cook, and Musalem will be scrutinized for clues about the Fed's reaction to weakening labor data. While political pressure mounts for lower rates, structural demands for defense spending, tax cuts, and technological investments continue driving Treasury yields upward—creating crosscurrents that may suppress risk assets.