Federal Reserve Chairman Jerome Powell delivered a surprisingly moderate message at this year's Jackson Hole symposium (his last as Fed chair), indicating that rate cuts could begin as early as September 2025. He emphasized the growing risks to employment, even as inflation remains a concern, and described the situation as "a challenging situation."

Markets reacted quickly. The US dollar plummeted, and Treasury bond yields fell. Stocks rebounded, especially tech and small-cap stocks. The forecast now points to an 80-85% chance of a 25 basis point rate cut next month.

Foreign exchange markets also experienced fluctuations. The Indian rupee gained ground and the Chinese yuan also benefited from the Federal Reserve's change in stance.

In the realm of cryptocurrencies — the world they focus on — the moderate tone is reigniting optimism. Analysts point to a renaissance of cryptocurrencies, with assets like $XRP and $BTC seeing bullish momentum. Some forecasts suggest XRP could reach $5-$8, although sudden drops still remind us of the volatility.

Key points at a glance

What's happening and why it matters

Powell signals rate cuts in September. Markets expect a loosening in the future: a moderate shift is confirmed.

The fall of the dollar and yields fuels risk appetite: stocks, cryptocurrencies, emerging assets

Cryptocurrency markets are buzzing. Rate cuts are driving bullish momentum in digital assets.

Monetary changes worldwide. The rupee and yuan strengthen against the weakening dollar.

But inflation and data matter. The Fed remains cautious; upcoming inflation and employment reports could slow down or reverse the trend.

Powell's speech at Jackson Hole changed the tone: he no longer speaks of "higher rates for longer." Instead, he leans towards a more flexible monetary policy, citing fragile employment growth. As a result, rates are likely to drop, the dollar will weaken, and markets — including Binance, cryptocurrencies, the yuan, and the rupee — will be boosted.

Nevertheless, it is not a foregone conclusion. The inflation reported by the Fed remains high, and officials are divided. Key data, such as the PCE inflation index, employment figures, and GDP, will determine the degree of moderation from the Fed.

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