After Powell's speech in Jackson Hole, market bets on a rate cut in September soared nearly 90%
Federal Reserve Chairman Powell stated tonight at the Jackson Hole annual meeting in Wyoming that if an overheating labor market threatens price stability, the Fed will take "preemptive" action; however, he also emphasized that merely estimating whether employment has surpassed its potential maximum level does not necessarily trigger policy tightening.
After the speech, CME's "FedWatch" quickly raised the probability of a rate cut. Data shows that the probability of a 25 basis point cut in September rose to 89.21%, while the probability of keeping rates unchanged is only 10.8%; the cumulative probability of a 25 basis point cut in October is 49%, the cumulative probability of a 50 basis point cut is 45.8%, while the probability of maintaining the current rate is only 5.3%.
As a result of Powell's speech, the trading market reacted strongly. According to Coingecko data, Bitcoin surged by 1.6% to $116,798 million within the past hour, and Ethereum also rose by 1.6% to $4,655 in the past hour.
In summary, two rate cuts within the year have been fully priced into the market's rate cut cycle. Traders are also demonstrating through their actions that the path of easing this year has become a consensus.
