The market is strongly expecting the Federal Reserve (Fed) to cut rates as early as September, signaling a major recovery for Q4 2025.
Weak job data, increasing political pressure, and soft signals from the Fed are motivating investors to believe in the upcoming interest rate cut, helping to boost liquidity and support risk assets like cryptocurrencies.
MAIN CONTENT
The likelihood of the Fed cutting rates in September is nearing 90%, with expectations of three cuts in 2025 rising to 50%.
The Fed and experts like Mary Daly emphasize the need for flexibility due to the volatile economic and labor situation.
The cryptocurrency and stock markets have reacted positively, expecting a strong recovery in Q4 based on favorable monetary policy and economic conditions.
What is the likelihood of the Fed cutting rates in September?
The odds for the Fed to cut interest rates at the September meeting are currently around 88%, according to CME's FedWatch tool, previously reaching 94%. At the same time, the chances of the Fed cutting rates three times in 2025 have risen to 50%, up from 20% last week, indicating a significant policy shift favorable to the market.
The Fed's interest rate cut will help inject more liquidity, boost investment, and improve market sentiment, especially in the context of increasing economic and political pressure in the U.S.
What is Mary Daly's view on the interest rate cut strategy?
Mary Daly, President of the San Francisco Fed, believes that two rate cuts in 2025 are still appropriate, but she does not rule out the possibility of further increases if the labor market weakens. She emphasizes the importance of being flexible and updating economic data from inflation and employment rates before each decision.
"We need to closely monitor the latest economic data to act promptly and accurately in upcoming Fed meetings." – Mary Daly, President of the San Francisco Fed, August 2025
Reuters, 4/8/2025
This view reflects the Fed's caution and risk management experience, while also preparing investors for potential volatility.
Why is the interest rate cut in September important?
Comments from Mary Daly come amid former President Donald Trump's continuous push for the Fed to cut rates immediately to prevent the U.S. economy from declining further. A rate cut in September could help alleviate pressure on the job market and financial markets, providing timely support amid slowing growth.
The leadership change at the U.S. Department of Labor and pressure on Fed Chair Jerome Powell indicate a potential policy turnaround to maintain economic growth and stabilize the market.
How do the markets and cryptocurrencies react to expectations of interest rate cuts?
U.S. stocks have rebounded in the first session of the week after last week's sell-off, as investors expect the Fed to cut rates. The cryptocurrency market also surged, benefiting from weak job data and expectations of monetary easing.
Analyst Alex Krüger predicts that cryptocurrency prices will recover in Q4, thanks to three interest rate cuts, improved regulatory frameworks, and increased adoption of new technologies. Bitcoin is expected to reach $200,000–$250,000 by mid-2026 if the Fed shifts to a softer policy.
"If history repeats itself like in 2024, the Fed's easing policy will help Bitcoin prices double by the end of the year." – Alex Krüger, Cryptocurrency Analyst, August 2025
X.com, 5/8/2025
Following that, major coins like Ethereum, Cardano, and XRP have risen between 2.6% and 8%, reinforcing expectations of a strong cryptocurrency market recovery in the final months of the year.
Frequently Asked Questions
Is the Fed's interest rate cut in September certain?
The current odds are nearly 90%, reflecting very high expectations, but the interest rate cut still depends on updated economic data.
What does Mary Daly say about the interest rate cut plan?
She believes that two cuts are reasonable, but there could be increases if the labor market continues to weaken.
How does the interest rate cut affect cryptocurrencies?
Helps improve liquidity, support prices, and drive recovery along with positive regulatory factors.
How does the financial market react to signals of interest rate cuts?
Stocks and cryptocurrencies have rebounded strongly, showing confidence in the Fed's easing policy.
What are the key factors influencing the Fed's decision?
Job data, inflation indicators, and political pressure are key factors to watch.
Source: https://tintucbitcoin.com/fed-co-giam-lai-suat-thang-9/
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