Key Takeaways
- Jerome Powell is expected to hint at a 25 basis point rate cut in September.
- U.S. stocks and gold are performing well, nearing record highs.
- Bitcoin is still nearly 20% below its all-time high.
Federal Reserve Chairman Jerome Powell is expected to prepare markets for a 25 basis point rate cut during his keynote address at the Jackson Hole Economic Symposium.
The speech, scheduled for Friday at 10 a.m. ET, is highly anticipated as traders have already priced in a 100% chance of a September rate cut. T
he FOMC minutes released from the July meeting noted that a “vast majority” of Fed participants see the rate cut as appropriate.
Cautious approach
Powell is likely to indicate that the Fed will take a cautious approach, warning against expecting an extended series of rate reductions after September.
The focus will be on stabilizing the economy without cutting rates aggressively in the coming months.
Traditional markets respond well
Traditional markets have responded positively to the potential shift in policy.
U.S. stock indices like the S&P 500 are near record highs, while gold recently hit a record high of $2,566. Bond markets are also performing well, with 10-year U.S. Treasury yields falling to 3.77%.
Bitcoin trails
However, Bitcoin remains sluggish.
Trading around $60,800, Bitcoin is down nearly 20% from its all-time high of $73,500, despite continued institutional interest and positive regulatory news.
