U.S. Treasury Secretary suggests 50bps rate cut, boosting cryptocurrency market

Scott Bessent, U.S. Treasury Secretary, has just proposed that the Federal Reserve (#Fed ) should consider cutting interest rates by 50 basis points (bps) in September. This proposal comes after weak employment data and a slight increase in inflation, signaling a more accommodative monetary policy.

Positive impact on financial and cryptocurrency markets

According to Bessent, the downward adjustment of employment figures for May and June, along with July's inflation data at 2.7%, strengthens the case for a significant rate cut. Lower interest rates will reduce borrowing costs, encourage spending and investment, and promote capital flows into higher-yielding risk assets, including cryptocurrencies.

Cryptocurrency markets reacted swiftly to this news, with many leading digital assets experiencing strong price increases. Ethereum, in particular, has reached multi-year highs.

Expectations and caution

Although the market is anticipating a rate cut, investors remain cautious. While the likelihood of a 25bps cut next month is almost certain, the Fed will still need to consider additional employment and inflation data before making a final decision. This event highlights the increasingly important role of macroeconomic policies on the cryptocurrency market, and investors are closely monitoring any signals from regulators to adjust their strategies. #anh_ba_cong