Federal Reserve's Powell dovish 'September rate cut probability surges', Bitcoin breaks through $117,000, Ethereum rises close to historic high

Federal Reserve Chair Jerome Powell's speech at Jackson Hole released dovish signals, causing Bitcoin to surge and Ethereum to approach historic highs. (Background: Powell's farewell show) Will Jackson Hole's speech tonight at 10 PM signal a Fed rate cut? Beware of sharp fluctuations. (Background information: Powell's dovish or hawkish stance at the global central bank meeting on August 22? Goldman Sachs predicts: three rate cuts this year, optimistic about short-term U.S. Treasuries) On August 22, Taiwan time, U.S. Federal Reserve Chair Jerome Powell delivered an important speech at the global central bank meeting in Jackson Hole, Wyoming, which is his last Jackson Hole speech as Fed Chair and attracted global financial market attention. Core content of Powell's speech: Powell reviewed the current economic situation in the U.S., outlined the Fed's monetary policy direction, and indicated that the Federal Reserve would seek a more balanced strategy between inflation and employment targets. Powell pointed out that the U.S. economy has shown resilience over the past year, but is currently facing the dual challenges of inflationary pressures and a cooling labor market. He emphasized that while the labor market is close to full employment, only 73,000 jobs were added in July, and data from the previous two months were revised downwards, indicating a significant slowdown in job growth and an increase in economic downside risks. Regarding monetary policy, Powell stated that the current federal benchmark interest rate is at a moderately restrictive level, and the Federal Reserve may adjust its policy at the September FOMC meeting. He emphasized that the Federal Reserve will act cautiously to avoid short-term inflation caused by tariffs turning into a long-term problem, while gradually adjusting interest rates to neutral levels to support economic stability. Powell also supplemented the revision of the monetary policy framework for 2025, emphasizing the Fed's goals of stabilizing prices and balancing employment, which, compared to 2020, places greater emphasis on proactively controlling inflation progress. Furthermore, Powell reiterated the independence of the Federal Reserve, indirectly responding to Trump's calls for significant rate cuts and criticisms of Fed governors. He stated that the Federal Reserve will make decisions based on data and will not be influenced by political pressure. Market interpretation: Powell's speech is dovish, significantly increasing the probability of a rate cut in September. Market analysts generally believe that Powell's speech is more dovish, indicating that the Federal Reserve is more focused on supporting the labor market rather than solely focusing on controlling inflation. Powell's openness to rate cuts, cautious optimism regarding inflation, and emphasis on the downside risks to the employment market are all interpreted as signals that the Federal Reserve is inclined towards more accommodative policies. Some institutions predict that if subsequent data (such as PCE inflation data) supports a rate cut, the Federal Reserve may initiate a continuous rate cut cycle, gradually lowering rates to neutral levels. Additionally, data from the CME FedWatch shows that the market expects the Fed to cut rates by 25 basis points in September, with the probability now reaching 87.3%, a significant increase from 75% just a day ago. Bitcoin and Ethereum surge: Affected by Powell's dovish remarks, Bitcoin surged on the evening of August 22, breaking through $117,000, with a 24-hour increase of up to 4%. Ethereum was even stronger, skyrocketing past $4,800, with a 24-hour increase of 14.4%, just a few dozen dollars away from its historic high. Bitcoin trend. Source: OKX Related reports: Rate cuts, DAT, and the wave of sell-offs, is the crypto bull market at its peak or still in the middle? Will the market rise after the Fed cuts rates in September? U.S. July PPI explodes) Bitcoin spikes to $117,000, Trump's tariffs ringing inflation alarm, will the Fed still cut rates in September? "Federal Reserve's Powell dovish 'September rate cut probability surges', Bitcoin breaks through $117,000, Ethereum rises close to historic high" This article was first published on BlockTempo (the most influential blockchain news media).