Bessent ’Surprised’ Powell Hasn’t Signaled More Aggressive Rate Cuts - What It Means for Crypto
Fed Chair's cautious stance shocks markets as digital assets await monetary policy pivot.
THE WAITING GAME
Powell's reluctance to telegraph deeper cuts leaves traders scratching their heads. Bessent's surprise echoes across trading desks where expectations had priced in more dovish signals.
CRYPTO'S INTEREST RATE SENSITIVITY
Lower rates typically fuel risk-on assets—and Bitcoin's historical inverse correlation with traditional finance makes this Fed hesitation particularly puzzling. The digital gold narrative strengthens with every basis point of delayed easing.
THE TRADITIONAL FINANCE JAB
Meanwhile, Wall Street continues playing musical chairs with economic indicators—because nothing says 'stable monetary policy' like waiting until the last possible moment to acknowledge obvious trends.
Market observers now watch for any hint of policy shift that could unleash the next crypto bull run.
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“Rates are too restrictive, they need to come down,” Bessent said in an interview with Fox Business on Wednesday. “I’m a bit surprised that the chair hasn’t signaled that we have a destination before the end of the year of at least 100 to 150 basis points.”
Market Expects Two More Rate Cuts by End of 2025
While Powell has remained firm in his stance of evaluating monetary policy based on incoming economic data, the market still expects two additional rate cuts by the end of the year. CME’s FedWatch tool assigns 77.1% odds of this scenario, down from 81.5% a week ago and up from 37.7% a month ago. The odds of one more rate cut by year-end sit at 21.9%, down from 23.9% a day ago and up from 17.3% a week ago.
That comes as Fed officials are split on where rates are headed, with some pushing for additional cuts to support growth and employment, while others caution that keeping rates higher is necessary to ensure inflation remains under control.
