September Rate Cut Odds Surge After Powell, What’s Next for BTC and ETH?

Jerome Powell, the Federal Reserve Chairman who might be serving his last months at the helm of the central bank, addressed the nation yesterday and showed a cautious pivot in the institution’s monetary policy.

The financial markets, including crypto, quickly picked up his words as promises that there would be an interest rate cut as soon as September.

Polymarket Agrees

Given its success rate of over 90% in the past, Polymarket has become among the most reputable websites for different types of bets, including interest rate cuts. The odds for such reductions to be made as soon as September shot up in early August from 35% to almost 80% following some positive reports about the state of the US economy.

However, they started to decline in the following weeks, especially after the hotter-than-expected PPI data from last week. The culmination was yesterday, when the odds plunged to 57% ahead of the highly anticipated speech by the Fed Chair from Jackson Hole.

Although he failed to provide any precise details on when a rate cut will occur, he offered mild hints about a potential pivot in the central bank’s monetary policy. All financial markets reacted immediately. Crypto didn’t disappoint as ETH and BNB skyrocketed to new all-time highs, while BTC rose from under $112,000 to over $117,000 before correcting slightly.

The focus is now on next month’s FOMC meeting, which will reveal whether Powell indeed intends to implement a rate cut, a move that US President Donald Trump has urged for months.

The odds on Polymarket are in favor of such a rate reduction, as they jumped to 78% for a 25 bps cut.

Impact of Powell’s Speech

CryptoPotato spoke with Marcin Kazmierczak, co-founder of RedStone, about the impact of Powell’s comments and what investors can expect now.

“While he opened the door to potential rate cuts, his emphasis on tariff-driven inflation and careful evaluation suggests the Fed won’t rush into aggressive easing. This measured approach creates an interesting dynamic for risk assets like Ethereum.”

ETH has indeed performed better than BTC in the hours after the meeting, which could be a first sign of what is to follow. Bitcoin has already tapped new all-time highs several times this year, while Ethereum just managed to do so yesterday. Consequently, Kazmierczak seemed more bullish on the second-largest digital asset.

“Looking ahead, if the Fed does initiate a modest easing cycle while maintaining its data-dependent approach, this could provide the final catalyst for ETH to break through the $4,800-$5,000 resistance zone and establish new all-time highs.”

However, Kazmierczak also cautioned that Powell’s “careful tone” could indicate that any rally will need to be “supported by continued fundamental adoption rather than purely monetary policy speculation.”