The Jackson Hole symposium is kicking off in Wyoming, with Jerome Powell set to give his final keynote speech as Federal Reserve chairman.
Make no mistake: this is a significant summit — for the economy, for the stock market, and for Bitcoin.
Two key themes have emerged. The first is whether he will hint at imminent cuts to interest rates, and the second centers on the Fed’s independence.
His past addresses have had the power to move markets. While Powell has long adopted a “wait and see” approach to slashing the cost of borrowing — arguing that more economic data is needed to make an informed decision — there is growing confidence that rates will fall when policymakers meet in September. We won’t just get a short-term view during Powell’s speech, but a longer-term forecast too.
The latest figures from the CME FedWatch tool indicate there’s a 79.2% chance of a 25 basis point cut next month, with 20.8% anticipating rates will stay the same. Lower interest rates could prove beneficial for Bitcoin, and prompt investors to seek greater returns from riskier assets.
Meanwhile, the Fed chair has had to contend with repeated attacks from Donald Trump, who has taken to calling him “Too Late” Jerome Powell. The president has long been frustrated at the central bank’s reluctance to drastically cut interest rates — especially considering it increases the cost of government borrowing. Just this week, he also called for another Fed governor, Lisa Cook, to resign.
The Federal Reserve operates independently, but there are growing signs that the Trump administration wants greater control of its key functions. As Activtrade’s Carolane de Palmas told Cryptonews in an interview, this unsettles the markets, but could boost Bitcoin given its status as a “non-sovereign asset that operates outside of the influence of any government or central bank.”
Zooming out, another challenge dominating 2025 relates to the weakening dollar, with the greenback’s declines widely linked to Donald Trump’s controversial tariffs. Last month, eToro research suggested that investors are beginning to take action as a result — rotating out of U.S. stocks and into gold and cryptoassets.
We managed to get a glimpse into the Fed’s thinking when minutes from their July meeting were publicly released on Wednesday. It showed that most policymakers continue to believe that it isn’t the right time to cut interest rates, not least because inflation remains stubbornly high.
However, there was a significant development, with two governors — Michelle Bowman and Christopher Waller — voting against the decision to hold rates and calling for a cut instead. This is the first time something like this has happened in more than 30 years.
Weighing heavily on the minds of the Federal Open Markets Committee was Trump’s trade war, with the minutes cautioning there is “considerable uncertainty remained about the timing, magnitude, and persistence of the effects of this year’s increase in tariffs.”
That’s because it may take a few quarters for the full impact of tariffs to make its presence felt in the economy — from the businesses that import goods, to the customers who will end up paying higher prices at the tills.
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Reuters has crunched the numbers to assess the impact of Powell’s past speeches on the market. In the month that’s followed each of his seven past addresses, the S&P 500 has dropped by an average of 2%. Bitcoin’s close correlation with the markets could therefore indicate that further pullbacks lie ahead, assuming history ends up repeating itself.
Things change when you examine the timeframe from his speech to the end of each calendar year, with the S&P 500 rising by an average of 2.3%.
Examining what to expect from Powell, a recent UBS research note said:
“He may offer some soft guidance that rates may move lower at a coming meeting. But, this is his last speech at Jackson Hole. He may never again have a platform this influential to offer his view of how his history should be written.”
Bitcoin and Ether ETFs on Wall Street have now suffered outflows for four days on the bounce — illustrating the high degree of uncertainty investors are feeling right now. Jackson Hole will be a crucial test for the crypto markets, and could determine whether bullish momentum returns.
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