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Tag: Federal Reserve

  • How the government shutdown disrupts critical economic data

    The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.“The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.“We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.For the time being, the Fed, economists, and investors will likely focus more on private data.On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.“Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.

    NEW YORK —

    The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.

    The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.

    If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.

    The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.

    “The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”

    The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.

    A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.

    “We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.

    The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.

    A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.

    On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.

    So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.

    Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.

    For the time being, the Fed, economists, and investors will likely focus more on private data.

    On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.

    The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.

    “Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.

    The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.

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  • Federal Reserve’s gen AI experimentation will take years, Powell says

    Even an institution as steeped in tradition as the Federal Reserve is exploring use cases for gen AI.  “Generative AI has all the earmarks of emerging technology that could be very important in our economy and in our society,” Fed Chair Jerome Powell said during a panel at the Greater Providence Chamber of Commerce in […]

    Vaidik Trivedi

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  • Federal Reserve’s gen AI experimentation will take years, Powell says

    Even an institution as steeped in tradition as the Federal Reserve is exploring use cases for gen AI.  “Generative AI has all the earmarks of emerging technology that could be very important in our economy and in our society,” Fed Chair Jerome Powell said during a panel at the Greater Providence Chamber of Commerce in […]

    Vaidik Trivedi

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  • Federal Reserve’s gen AI experimentation will take years, Powell says – FinAi News

    Even an institution as steeped in tradition as the Federal Reserve is exploring use cases for gen AI.  “Generative AI has all the earmarks of emerging technology that could be very important in our economy and in our society,” Fed Chair Jerome Powell said during a panel at the Greater Providence Chamber of Commerce in […]

    Vaidik Trivedi

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  • Wall Street indexes climb as investors brush off government shutdown uncertainties

    By Sinéad Carew and Niket Nishant

    (Reuters) -Wall Street indexes closed up on Monday with the Nasdaq leading gains as investors bought heavyweight technology stocks and shrugged off the uncertainty of a potential U.S. government shutdown and hawkish remarks from Federal Reserve officials.

    Technology provided the benchmark S&P’s biggest boost as investors bet on growth from artificial intelligence and expectations that the Fed will keep cutting interest rates as it grapples with persistent inflation concerns and labor market uncertainties.

    A major focus for Wall Street this week is a standoff between Republicans and Democrats over funding that has raised the prospect of a government shutdown beginning Wednesday, the first day of the U.S. government’s new fiscal year.

    Even as the Labor Department prepared for a potential delay of its September jobs report in the event of a shutdown, this did not seem to be the key market driver, said Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina.

    “Investors are clinging to the positives,” Bell said, pointing to rate easing hopes and signs of economic resilience from recent releases including housing market and consumer spending data.

    “The market is not going to shoot to the moon, because this is a risk. But investors can look through the potential for a shutdown, because if it does occur it will likely be resolved quickly and the market can resume focusing on the things that do matter, like earnings, monetary policy and AI investments.”

    While shutdowns have not tended to impact corporate results historically, the imminent threat may have limited gains and kept trading volume light on Monday, according to Burns McKinney, portfolio manager and NFJ Investment Group in Dallas, Texas.

    “The only reason it would truly move markets is if it affects the bottom line. Historically speaking, government shutdowns are brief and they don’t have an impact on profitability so investors tend to be forward-looking,” said McKinney.

    “It’s just like smoke on a racetrack. They just keep the wheels straight, manage through the stress and move forward through the smoke.”

    The Dow Jones Industrial Average rose 68.78 points, or 0.15%, to 46,316.07, the S&P 500 gained 17.51 points, or 0.26%, to 6,661.21 and the Nasdaq Composite gained 107.09 points, or 0.48%, to 22,591.15.

    Investors were also monitoring Fed policymakers’ commentary for any signs of concern over the potential loss of economic visibility should a shutdown materialize.

    Cleveland Fed President Beth Hammack, among the most hawkish Fed officials and not a voter on policy this year, said on Monday the central bank needed to maintain restrictive monetary policy to cool inflation.

    St. Louis Federal Reserve President Alberto Musalem, a voter on rates this year, said he was open to further interest rate cuts but that the Fed must be cautious and keep rates high enough to continue to lean against inflation, which remains roughly a percentage point above the central bank’s 2% target.

    Traders, however, are pricing in a roughly 89% chance of a 25-basis-point rate cut at the next Fed meeting, according to CME Group’s FedWatch tool.

    Among the S&P 500’s 11 major industry sectors, nine advanced. With oil prices falling more than 3%, the energy sector was the biggest laggard, ending down 1.9%. Consumer discretionary was the biggest percentage gainer, adding 0.6%.

    But for index point boosts, technology was the clear leader with big pushes from AI chip leader Nvidia, up 2%, and Microsoft, which added 0.6%.

    Electronic Arts shares rallied 4.5% after the game publisher agreed to be taken private in a $55 billion deal, fueling hopes for broader deal prospects, said Bell of 248 Ventures, who saw the transaction as “confirmation that the M&A market is open.”

    Lam Research shares advanced 2% after Deutsche Bank upgraded the rating on the chip-making equipment firm to “buy” from “hold.”

    AppLovin set a fresh record high before closing up 6.3% at $712.36, also providing one of the biggest lifts for the S&P 500. Morgan Stanley raised the target price on the stock to $750 from $480.

    After U.S. President Donald Trump shared a video on Sunday promoting the health benefits of hemp-derived cannabidiol, U.S.-listed shares of cannabis-related companies rose. Canopy Growth rallied 17% to $1.57 while Cronos Group rose almost 13% to $2.97 and Tilray Brands jumped 60.9% to $1.85.

    Advancing issues outnumbered decliners by a 1.38-to-1 ratio on the NYSE where there were 337 new highs and 80 new lows. The S&P 500 posted 38 new 52-week highs and six new lows while the Nasdaq Composite recorded 116 new highs and 74 new lows.

    On the Nasdaq, 2,525 stocks rose and 2,118 fell as advancing issues outnumbered decliners by a 1.19-to-1 ratio.

    On U.S. exchanges about 17.91 billion shares changed hands compared with the 18.25 billion average from the last 20 sessions.

    (Reporting by Sinéad Carew in New York, Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Sriraj Kalluvila, Shilpi Majumdar and Richard Chang)

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  • Ken Griffin has a warning for Trump and the GOP: ‘I would not underestimate how grating a 3% inflation rate could be’ on Americans | Fortune

    For Citadel CEO Ken Griffin, the political implications of still-elevated inflation are not lost on him.

    Inflation has come down a lot from 9% in 2022 to 2.9% in the government’s latest CPI report. Core PCE prices, the Fed’s favorite gauge of inflation, rose 2.9% in August, matching July’s climb. 

    But inflation has been sticky as tariffs take hold, and Griffin predicted inflation will continue to be in the mid-2% to 3% range next year, still above the Fed’s 2% target.

    “The American voters have been exhausted of inflation,” he told CNBC on Thursday.

    In 2024, the high cost of living was a focal point in Trump’s reelection campaign, and Biden-era inflation hurt Democrats. They lost the White House and Congress, while Trump won all seven swing states.

    Many voters blamed Democratic policies—including stimulus spending—for sustained, high costs, exit polls found.

    “There’s no doubt that the president and the Republicans came to power on the back of frustration with inflation,” Griffin said. “I would not underestimate how grating a 3% inflation rate could be to tens of millions of American households.”

    Inflation could feature heavily in midterm elections next year, as the Republican Party looks to defend narrow majorities in the House and Senate. And voters are souring on Trump’s economy.

    A recent Reuters/Ipsos poll showed only 28% of respondents approved of Trump’s handling of their cost of living. A YouGov/Economist poll put Trump’s approval rating on the economy at an all-time low of 35%.

    One indicator of affordability has been a thorn in Trump’s side: high mortgage rates. Yet as Trump looks to the Fed for homeowner relief, many worry about political influence over the independent body.

    Trump has been criticized lately for pressuring the Federal Reserve and threatening its independence. Critics argue that his efforts to appoint loyalists to the Fed, public calls to lower interest rates, and attempts to remove a sitting governor represent a clear move to sway monetary policy for political purposes. 

    Griffin advised that continued Fed independence would be in Trump’s interest.

    “If I were the president, I would let the Fed do their job,” he said. “I would let the Fed have as much perceived and real independence as possible, because the Fed often has to make choices that are pretty painful to make.”

    The Federal Open Market Committee cut interest rates by a fourth of a percent earlier this month to buoy a slowing labor market. The move comes after months of continued pressure from the Trump administration on Fed Chair Jerome Powell and other committee members to cut rates.

    Still, President Donald Trump has been vocal about cutting rates further, even though the move likely will risk further price increases. 

    Griffin warned that erosion of Fed independence could lead to Americans conflating the White House and central bank.

    “If the president’s perceived as being in control of the Fed, then what happens when those painful choices have to be made?”

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    Nino Paoli

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  • S&P 500 has longest losing streak for over a month as Wall Street stumbles to third straight loss | Fortune

    Wall Street stumbled to a third straight loss on Thursday as U.S. stocks gave back more of their big gains for the year so far.

    The S&P 500 fell 0.5% and marked its longest losing streak in more than a month. The Dow Jones Industrial Average dropped 173 points, or 0.4%, and the Nasdaq composite sank 0.5%. All three indexes are still near their records set at the start of the week, though.

    Stocks felt pressure from reports showing the U.S. economy may be stronger than economists thought. While that’s encouraging news for workers and for people looking for jobs, it could make the Federal Reserve less likely to cut interest rates several times in the coming months.

    The Fed just delivered its first cut of the year last week, and officials had penciled in more through the end of next year. That was critical for Wall Street after U.S. stocks shot to records since April in large part because of expectations for rate cuts. Easier rates can boost the economy and make investors more willing to pay high prices for stocks and other investments.

    But a stronger-than-expected economy could remove some of the Fed’s urgency, particularly because cuts to rates carry the risk of worsening inflation that’s already stubbornly high. If the Fed doesn’t cut rates as often as investors expect, it would empower criticism that the U.S. stock market is too expensive after rising so much, so quickly.

    “Buckle up,” warned Jonathan Krinsky, chief market technician at financial services firm BTIG.

    Stocks look to be in their most vulnerable position since their April lows given how much complacency has built up and how the rubber band has recently been “as stretched as it gets in some parts of the market,” Krinsky wrote in a research report.

    Wall Street’s ultimate hope is that the U.S. economy stays in a delicate balance where it’s slow enough to convince the Fed to cut rates but doesn’t become so weak that it leads to a recession.

    Treasury yields ticked higher in the bond market as traders pared bets for the number of upcoming cuts to rates by the Fed. The yield on the 10-year Treasury rose to 4.17% from 4.16% late Wednesday.

    One of Thursday’s stronger-than-expected economic reports said that fewer U.S. workers filed for unemployment benefits last week. That could be a signal that the pace of layoffs is slowing.

    Another report said the U.S. economy grew at a faster pace during the spring than earlier thought, while a third said orders blew past economists’ expectations last month for U.S. manufactured goods with a relatively long life span.

    On Wall Street, CarMax tumbled 20.1% after the seller of used autos reported a weaker profit for the latest quarter than analysts expected. It sold fewer vehicles during the quarter than it had a year earlier. It also was hurt because it increased its expectations for losses from loans made in earlier years.

    Jabil fell 6.7% even though it reported a stronger profit for the latest quarter than analysts expected, thanks in part to demand coming because of artificial intelligence. It also gave forecasts for upcoming revenue and profit that topped analysts’ expectations.

    Such moves typically send a stock’s price higher, but Jabil came into the day with an already huge gain of 56.6% for the year so far. That was more than quadruple the S&P 500’s rise over the same time.

    Another AI winner, Oracle, gave back 5.6%. Earlier this month, it surged to its best day since 1992 after announcing several big contracts signed because of AI.

    Starbucks slipped 0.5% after the coffee chain announced a $1 billion plan to restructure, including the closure of stores and the cutting of 900 nonretail jobs.

    On the winning side of Wall Street was IBM. It rose 5.2% after HSBC announced a promising trial with IBM of quantum computing in hopes of improving bond trading. The bank said they delivered an improvement of up to 34% in predicting how likely a trade would be filled at a quoted price.

    Companies are racing to develop quantum computing in order to solve complex problems beyond the reach of classical computers.

    KB Home swung between gains and losses after the homebuilder reported a stronger profit for the latest quarter than analysts expected. CEO Jeffrey Mezger said he was encouraged to see mortgage rates ease through the quarter, which could encourage more potential customers to buy homes.

    Mortgage rates have been sinking on expectations for coming cuts to rates by the Fed. KB Home’s stock finished the day with a dip of 0.6%.

    All told, the S&P 500 fell 33.25 points to 6,604.72. The Dow Jones Industrial Average dropped 173.96 to 45,947.32, and the Nasdaq composite sank 113.16 to 22,384.70.

    In stock markets abroad, indexes dipped in Europe following modest moves across much of Asia.

    ___

    AP Writers Matt Ott and Teresa Cerojano contributed.

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    Stan Choe, The Associated Press

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  • Accounting for uncertainty: How local banks and CPAs partner to deliver results | Long Island Business News

    In Brief:
    • Rising rates and real estate risks have pressured regional banks
    • Fed rate cuts could renew investor interest in community lenders
    • CPAs play a key role in connecting businesses with flexible financing
    • Case studies show local banks winning clients from larger institutions
    • Collaboration helps businesses secure favorable terms and reduce risk

    While worrisome economic forecasts sow doubts among investors and the Federal Reserve steps in to reverse its course of hiking interest rates, banks draw upon accounting firms for their expertise in advising clients. It’s a relationship that leverages valuable information about clients’ finances to help steer them toward optimal solutions for their businesses. However, regional bank leaders suggest that when seeking financing from a bank, size matters.

    During periods of high interest rates, big banks tend to draw a larger share of investment than smaller local banks. “Community and regional banks have been harder hit by the rising rate environment keeping investors on the sidelines,” says John Buran, CEO of Flushing Bank. “In addition, concerns over commercial real estate exposure in community and regional banks have caused investors to be wary of the category, keeping those banks undervalued.”

    Data shows that in the near term, larger banks may be better-equipped to handle the current economic climate. According to a recent Deloitte outlook, regional banks are “possibly facing the brunt of potential loan losses” from concentrated exposure to the distressed commercial real estate sector. Compared to banks with assets of more than $250 billion, mid-size and regional banks (with assets between $10 billion to $100 billion) have almost four times the amount of commercial real estate loans as a percentage of risk-based capital.

    Fortunately, the tide is turning for regional banks, and a wave of investment capital could be on the horizon, especially if the Federal Reserve continues to lower rates. “The reduced rates by the Fed makes improved earnings more likely,” Buran says, “making renewed investment in the community and regional banking space attractive.”

    Even though analysts have expressed concerns over midsize and regional banks’ balance sheets, Buran touts the advantages of working with local banks that are often glossed-over by industry reports. “Community banks tend to have a more streamlined credit approval process that allows them to be more timely in their responses to customers,” he notes. “They tend also to be more flexible with terms, rates, and conditions in their offers to respond to customer needs.”

    Besides offering banks access to clients, CPAs help facilitate transactions by communicating the strategic benefits of working with regional banks.

    “Accounting and advisory firms work with us to explain the advantages of various options to the client,” says Buran. “We engage with the professional firms to provide their clients with various rate options such as floating or fixed rates. We also offer swaps that help customers lock into rates long term with no volatility.”

    This engagement with accountants has already faciltated Flushing Bank to peel away a client from a larger bank. “We recently were referred by a CPA firm to a client who is a specialty flooring contractor that needed to replace their current bank,” Buran says. “Their bank was recently taken over by a much larger financial institution and the contracting company felt they were no longer serviced appropriately. We were able to take over the full relationship by providing cash management, deposit accounts and an owner-occupied mortgage.”

    For businesses that are expanding significantly, eyeing a merger or an acquisition or considering any other major transactions, accounting firms can offer crucial help in organizing financial strategies that are most beneficial to clients, given their comprehensive understanding of the client’s own business and the banking products offered during times of fluctuating interest.

    “During periods of rate volatility, we actively engage with banks through both group meetings and individual one-on-one interactions,” says James Aspromonti, managing director at CBIZ in Melville. “These discussions provide an open forum to exchange real-time insights on market trends, lending practices and credit risk perspectives. This collaborative engagement ensures that we can better advise our clients and keep them informed about current market dynamics and the outlook from key banking partners.”

    Putting this collaboration into practice has facilitated owners to minimize risk exposure and choose financing agreements that promote optimal flexibility. “We recently assisted a small business client who was considering the acquisition of another company,” Aspromonti explains. “Our role involved working closely with the client, the target company and their bank to determine the optimal amount and structure for the necessary financing. This collaboration was instrumental in evaluating different financing options, negotiating favorable terms, and ensuring that the agreements were both practical and aligned with the client’s long-term goals.”

    The outcome was successful for all involved, Aspromonti says. “By coordinating efforts among all parties, we helped our client make a well-informed decision and secured a payment structure that supported their growth while managing financial risk.”

    Recalling a time when banking flexibility afforded a client the help they needed, Buran describes a situation wherein a borrower who owned a shopping center underwent significant struggles during the pandemic, losing several tenants and extending temporary assistance to those that remained. The borrower and their CPA firm outlined a plan that included leasing and capital improvements in an effort to re-tenant the center.

    “The cash flow projections demonstrated the recovery of past rents, the viability of the owners’ leasing plans and a return to stabilized cash flow,” Buran says. “Based upon the analysis, the bank was comfortable executing an action plan that enabled the borrower to execute their plan over a three-year period. Today the center is 100% occupied with tenants paying as agreed.”

    The impact of the bank’s adaptability is still apparent. “The borrower continues to be successful in making loan payments as per their agreement with the bank.”


    LIBN Staff

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  • Bitcoin (BTC) Stopped at $113K, ASTER Pumps by Double Digits: Market Watch

    Bitcoin experienced a minor price decline over the past 24 hours. It failed in its attempt to cross $113,000 and, at one point, even tumbled below $111,500.

    Many of the leading altcoins are also in the red. Some exceptions, which have registered substantial price increases, include Aster (ASTER) and Immutable (IMX).

    Another Volatile Day for BTC

    Bitcoin’s price has been shaky throughout the past 24 hours. Yesterday (September 23), it surpassed $113,000, but that uptick was short-lived and gave way by another correction, which took the asset to as low as $111,400.

    The pullback followed comments from Fed Chairman Jerome Powell, who shared some worrying details about the American economy, including weakness in the labor market. He also claimed that the prices of stocks and other assets appear “fairly highly valued.” 

    The bulls, though, stopped BTC’s free fall and pushed the price to just south of $113,000. Over the past few hours, there has been another slight retreat, and as of press time, the asset trades at approximately $112,400.

    BTC Price, Source: CoinGecko

    Bitcoin’s market capitalization holds steady at roughly $2.24 trillion, nearly unchanged from yesterday, while its dominance over the altcoins stands at 56.16%.

    These Alts Head North

    The majority of the well-known altcoins have followed BTC’s steps and also posted losses over the past day. Ethereum (ETH) slipped 1% to under $4,200, Solana (SOL) is down 4% to $210, whereas Hyperliquid (HYPE) nosedived by 10% and is currently trading below $44. 

    However, it’s not all doom and gloom, as some are at the forefront of gains. ASTER – the cryptocurrency of the recently-launched decentralized exchange for trading perpetual futures contracts Aster – has exploded by 40% and is now worth around $2.33, while Immutable (X) has jumped by 10% to reach $0.75.

    Other altcoins in the green (albeit registering less substantial increases) include Quant (QNT), Sky (SKY), and Pi Network (PI). 

    The total market capitalization of the cryptocurrency sector has declined by 0.7% and stands at roughly $3.98 trillion.

    Cryptocurrency Market Overview
    Cryptocurrency Market Overview. Source: QuantifyCrypto
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    Cryptocurrency charts by TradingView.

    Dimitar Dzhondzhorov

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  • Mixed Signals From The Fed: What Does it Mean For Crypto Markets?

    Powell delivered a speech at the Greater Providence Chamber of Commerce on Tuesday, outlining the central bank’s economic outlook, which could heavily impact risk-on assets such as crypto.

    He said that GDP growth has moderated to around 1.5% in the first half of the year, down from 2.5% last year, and unemployment remains low at 4.3%. Inflation figures were also pessimistic, recently rising to 2.9% for Core PCE, which is above the Fed’s 2% target.

    There were mixed signals on whether the Fed has entered a new monetary policy cycle.

    “Our policy is not on a preset course. We will continue to determine the appropriate stance based on the incoming data, the evolving outlook, and the balance of risks.”

    Fed Still On The Fence

    Powell emphasized that “near-term risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation.” He also described the current policy stance as “still modestly restrictive,” suggesting room for further easing if conditions warrant.

    The dovish pivot with continued rate cuts generally supports risk assets like crypto, as lower rates reduce the opportunity cost of holding non-yielding assets. However, Powell cautioned about dropping rates too quickly. Upside inflation risks from tariffs could pause or reverse the easing cycle, which would be negative for crypto.

    “If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2 percent inflation.”

    Current CME futures markets predict a 92% chance that there will be another 0.25% rate cut at the Fed’s next meeting in late October.

    Fundstrat’s Tom Lee remained optimistic, stating that the Fed has never said that assets such as stocks were attractively priced, so the speech should not be taken as an ominous signal.

    Crypto Markets Hold Support

    The Fed’s emphasis on “no preset course” introduces uncertainty that crypto markets typically dislike. Markets have moved very little over the past 24 hours following their $200 billion slump earlier this week.

    Total capitalization has held steady at $3.96 trillion, keeping it within a range-bound channel that began in mid-July. Bitcoin fell further to $111,600 in late Tuesday trading but managed to recover the $112,000 support level on Wednesday morning in Asia.

    Ether has weakened, falling below $4,200 and failing to recover that level at the time of writing. Crypto analysts remained optimistic, however.

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    Martin Young

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  • Powell signals Federal Reserve to move slowly on interest rate cuts | Long Island Business News

    In Brief:
    • Powell warns against cutting rates too aggressively, citing inflation risks
    • Trump appointees Miran and Bowman push for faster, deeper cuts
    • Fed cut its key rate to 4.1% last week, first reduction this year
    • Divisions deepen within Fed as job market softens and inflation lingers

    Federal Reserve Chair Jerome Powell on Tuesday signaled a cautious approach to future interest rate cuts, in sharp contrast with other Fed officials this week who have called for a more urgent approach.

    In remarks in Providence, Rhode Island, Powell noted that there are risks to both of the Fed’s goals of seeking maximum employment and stable prices. But with the unemployment rate rising, he noted, the Fed agreed to cut its key rate last week. Yet he did not signal any further cuts on the horizon.

    If the Fed were to cut rates “too aggressively,” Powell said, “we could leave the inflation job unfinished and need to reverse course later” and raise rates. But if the Fed keeps its rate too high for too long, “the labor market could soften unnecessarily,” he added.

    Powell’s remarks echoed the caution he expressed during a news conference last week, after the Fed announced its first rate cut this year. At that time he said, “it’s challenging to know what to do.”

    The careful approach he outlined is quite different from that of some other members of the Fed’s rate-setting committee, particularly those who were appointed by President Donald Trump, who are pushing for faster cuts. On Monday, Stephen Miran said the Fed should quickly reduce its rate to as low as 2% to 2.5%, from its current level of about 4.1%. Miran was appointed by Trump this month and rushed through the Senate, taking his seat just hours before the Fed met last Tuesday. He is also a top adviser in the Trump administration and expects to return to the White House after his term expires in January, though Trump could appoint him to a longer term.

    And earlier Tuesday, Fed governor Michelle Bowman also said the central bank should cut more quickly. Bowman, who was appointed by Trump in his first term, said inflation appears to be cooling while the job market is stumbling, a combination that would support lower rates.

    When the Fed cuts its key rate, it often over time reduces other borrowing costs for things like mortgages, car loans, and business loans.

    “It is time for the (Fed) to act decisively and proactively to address decreasing labor market dynamism and emerging signs of fragility,” Bowman said in a speech in Asheville, North Carolina. “We are at serious risk of already being behind the curve in addressing deteriorating labor market conditions. Should these conditions continue, I am concerned that we will need to adjust policy at a faster pace and to a larger degree going forward.”

    Yet Powell’s comments showed little sign of such urgency. Other Fed officials have also expressed caution about cutting rates too fast, reflecting deepening divisions on the rate-setting committee.

    On Tuesday, Austan Goolsbee, president of the Federal Reserve’s Chicago branch, said in an interview on CNBC that the Fed should move slowly given that inflation is above its 2% target.

    “With inflation having been over the target for 4 1/2 years in a row, and rising, I think we need to be a little careful with getting overly up-front aggressive,” he said.

    Last week the Fed cut its key rate for the first time this year to about 4.1%, down from about 4.3%, and policymakers signaled they would likely reduce rates twice more. Fed officials said in a statement that their concerns about slower hiring had risen, though they noted that inflation is still above their 2% target.

    In a question and answer session, Powell said that tariffs, so far, have had a fairly limited impact on inflation, though he suggested that could change.

    He said U.S. companies are paying most of the tariffs, which contradicts Trump administration claims that overseas companies are shouldering the payments. But he said that the pass-through of tariff costs to consumers “has been later and less than we expected.”

    He also said the Fed continues to tune out attacks against it and added that the Fed does not consider politics when making its decisions. Powell and the Fed have been under steady attack from Trump, though Powell did not name him.

    “Whenever we make decisions, we’re never, ever thinking about political things,” Powell said. “Truth is, mostly people who are calling us political, it’s just a cheap shot. … We don’t get into back and forth with external people.”


    The Associated Press

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  • Here are the 3 biggest ways the federal interest rate cut could impact your money

    The Federal Reserve on Wednesday delivered its first rate cut since December, a move that will ripple through everything from home loans to credit cards, although not all Americans will notice the change in the same way.

    The Fed cut reduces its federal funds rate — what banks charge each other for short-term loans — by one-quarter point, shaving its target range to between 4% and 4.25%, down from its prior range of 4.25% to 4.5%. 

    Though incremental, the policy turn is significant. Fed officials foresee two additional cuts in 2025 and one more in 2026, a trajectory that could lower rates by a full percentage point and lighten the load for millions of borrowers. For now, the quarter-point reduction will trickle through unevenly: some borrowers will see relief almost immediately, while others may notice little change, depending on their rates and the products they hold, according to experts.

    “Any reduction is welcome, and especially if this is the first of several to come, which it sounds like it might be,”Matt Schulz, chief consumer finance analyst at LendingTree, said in a statement. “That’s a positive thing.”

    One area where Schulz doesn’t expect consumers to see significant change is on credit card rates. While banks will lower their annual percentage rates in response to the cut, it’s probably not going to make much of a dent for people who carry a balance, given that the average APR currently stands at about 20%.

    “That quarter point isn’t going to make that much of a difference,” Schulz said.

    Here’s where you’re most likely to feel an immediate impact from the Fed’s reduction — for better and worse. 

    Home equity line of credit

    A home equity line of credit (HELOC) represents one of the financial products where the Fed rate cut could provide a bigger bang for borrowers’ bucks.

    A HELOC is a line of credit based on the value of your home. In some ways, it is similar to a credit card, because it provides a maximum credit line that borrowers can draw down and their interest rates are variable — which means they rise and fall based on the prime rate, which in turn is influenced by the fed funds rate. 

    If you have a HELOC, you can expect your rate to decline by one-quarter point within a month or two, according to Bankrate. The average HELOC today has a rate of about 8.05%, the financial site notes. 

    “HELOCs are one of the types of loans that tend to be directly impacted, so if you do have a HELOC, that quarter-point reduction can be pretty significant,” Schulz said.

    According to CBS News’ Managing Your Money, that 0.25 percentage-point reduction could trim a borrowers’ costs on a $100,000 HELOC by about $173 annually. Bigger savings could be in store if the Fed carries through with additional rate cuts later this year and in early 2026. 

    Mortgages

    House hunters enjoyed a preemptive benefit from the Fed rate cut, as mortgage rates have declined this month in anticipation of lower rates. 

    Average rates for a 30-year fixed-rate mortgage fell to 6.35% this week, its lowest level in nearly a year. Just two years ago, mortgages approached 8%, hitting their highest levels since 2000.

    Mortgage rates aren’t set by the Fed, but they’re heavily influenced by its policy moves, as well as bond market investors’ expectations for economic growth and inflation.

    “It’s not just about what the Fed is doing today, it’s about what they’re expected to do in the future, and that’s determined by things like economic growth, what’s going to happen in the labor market and what do we think inflation is going to be like over the next year or so,” Danielle Hale, chief economist at Realtor.com, told AP News.

    While additional rate cuts later this year aren’t guaranteed to result in lower home loan rates, it’s a possibility, said Stephen Kates, financial analyst at Bankrate.

    “It means that they probably could go down more, and they may trend in that direction, even if they don’t move in lockstep,” he added.

    High-interest savings accounts

    Unfortunately, the Fed’s rate cut could have a negative impact on one group: Savers. 

    Since the Fed started hiking rates in 2022 to battle soaring inflation, high-interest savings accounts and certificates of deposit have been the silver lining for consumers. People who had money to sock away in one of those accounts or a CD could get rates as high as 5% in 2024.

    Currently, savers can still find high-interest savings accounts offering 4%, but those might drop soon as banks adjust their offers to reflect the Fed’s rate reduction, Schulz said. 

    “Expect yields on high-interest savings accounts and CDs to drop. Savers may want to act now by locking in today’s still-high rates before they fall further,” he noted. 

    The Associated Press

    contributed to this report.

    Aimee Picchi

    Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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  • Jerome Powell on signs of an AI bubble and an economy leaning too hard on the rich: ‘Unusually large amounts of economic activity’ | Fortune

    For months, Wall Street commentators have fretted that the artificial intelligence boom looks like a bubble, with capital spending – which some analysts estimate could reach $3 trillion by 2028 – fattening a few mega-cap firms, while lower-income workers suffer from a slack labor market. 

    On Wednesday, they got validation from an unlikely source: the chair of the Federal Reserve. 

    Jerome Powell said the U.S. is seeing “unusually large amounts of economic activity through the AI buildout,” a rare acknowledgement from the central bank that the surge is not only outsized, but also skewed toward the wealthy.

    That imbalance extends beyond markets. Roughly 70% of U.S. economic growth comes from consumer spending, yet most households live paycheck to paycheck. That demand picture has taken on a shape that analysts call  K-shaped: while many families cut back on essentials, wealthier households continue to spend on travel, tech, and luxury goods—and they continued to do so in August. For now, the inflation recovery depends heavily on this dynamic remaining in fragile stasis. It’s a fix that works well until it doesn’t, if it could be described as working at all.

    “[Spending] may well be skewed toward higher-earning consumers,” Powell told reporters after the Fed’s latest policy meeting. “There’s a lot of anecdotal evidence to suggest that.”

    That skew has become increasingly obvious in markets. Just seven firms — Microsoft, Nvidia, Apple, Alphabet, Meta, Amazon, and Tesla — now make up more than 30% of the S&P 500’s value. Their relentless AI capex is keeping business investment positive, even as overall job growth has slowed to a crawl. Goldman Sachs estimates AI spending accounted for nearly all of the 7% year-over-year gain in corporate capex this spring.

    The comments underscore a widening concern at the Fed: that while headline GDP growth is holding above 1.5%, the composition of that growth is uneven, unlike previous booms in housing or manufacturing. 

    Powell pointed to “kids coming out of college and younger people, minorities” as struggling to find jobs in today’s cooling labor market, even as affluent households continue to spend freely and companies funnel cash into cutting-edge technologies.

    The imbalance reflects what Powell described as “a low firing, low hiring environment,” where layoffs remain rare but job creation has slowed to a crawl. That dynamic, combined with the concentration of economic gains in AI and among the wealthy, risks deepening inequality, and complicates the Fed’s attempt to balance its inflation and employment mandates.

    That disconnect risks widening the gap between Wall Street and Main Street. While affluent households continue to spend freely and tech titans pour billions into data centers and chips, revised jobs data show the economy added just 22,000 positions in August, with unemployment edging up to 4.3%.

    “Unusually large” AI investment may sustain top-line growth, Powell suggested, but it’s doing little to lift the broad labor market.

    “The overall job finding rate is very, very low,” he said. “If layoffs begin to rise, there won’t be a lot of hiring going on.”

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    Eva Roytburg

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  • Federal Reserve lowers interest rates by 0.25 percentage points in first cut since December

    The Federal Reserve on Wednesday lowered its benchmark interest rate by 0.25 percentage points — its first cut since December — as the U.S. grapples with a stalling labor market and slower economic growth. 

    The Fed cut reduces the federal funds rate — what banks charge each other for short-term loans — to between 4% and 4.25%, down from its prior range of 4.25% to 4.5%. The last time the central bank eased borrowing costs was in December 2024, when it also trimmed rates by a quarter of a percentage point.

    Federal Reserve officials are also penciling in two more rate cuts in 2025, but only one in 2026, according to the central bank’s summary of economic projections. That may disappoint Wall Street, with investors before the meeting projecting a total of five cuts over the rest of the year and 2026.

    According to those median projections, Fed officials expect the nation’s unemployment rate, currently 4.3%, to reach 4.5% by year-end before ticking down to 4.4% in 2026 and 4.3% the following year. 

    Personal Consumption Expenditures (PCE) — the Fed’s preferred gauge of inflation — is forecast to level off at 3% this year, well above the central bank’s 2% annual target, before receding to 2.6% next year and 2.1% in 2027. The median projections for core inflation, which strips out volatile food and energy costs, forecasts PCE of 3.1% this year.

    The move comes as the Fed contends with a two-fold economic challenge: curbing inflation, which has flared in recent months, while supporting job growth, which has slumped. The Fed typically seeks to tame inflation by nudging up interest rates to slow economic growth, while cutting rates in periods when the economy is faltering to encourage consumer spending and business investment. 

    “Recent indicators suggest that growth of economic activity moderated in the first half of the year,” the Fed said in its statement. “Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated.”


    In acting to lower interest rates, the Fed is signaling that it views the slowing labor market as a more pressing concern than rising prices, as Fed Chair Jerome Powell underlined at his Jackson Hole address last month in Wyoming. 

    “Although labor demand is softening, labor supply issues continue to offset the weakness, and recession risks remain limited for now,” said Seema Shah, chief global strategist at Principal Asset Management, in an email before the announcement. “A more measured 25 basis point cut remains the appropriate response, allowing the Fed to get ahead of a slowdown without overreacting to early signs of strain.”

    Monthly change in jobs in the U.S. (Line chart)


    The rate cut comes amid intense political pressure on the Fed, with President Trump repeatedly accusing Powell of moving too slowly to ease borrowing costs and shore up economic activity. 

    Mr. Trump is also seeking to put his imprint on the Fed. To that end, he has sought to remove Fed Governor Lisa Cook from her seat on the central bank’s board, alleging that she engaged in mortgage fraud. She has denied committing fraud and challenged Mr. Trump’s authority to fire her, with an appeals court ruling Monday that Cook can keep her job.

    One vote for a jumbo cut

    An economic adviser to Mr. Trump, Stephen Miran, was confirmed by the Senate on Monday to take an open spot on the Fed’s Board of Governors. He will also sit on the 12-member Federal Open Markets Committee, or FOMC, which sets interest rates for the Fed.

    “Stephen Miran was a last-minute addition to the FOMC, but his vote won’t drastically alter the outcome. He joined too late to submit an economic projection and path for monetary policy,” Oxford Economics analysts said in a report this week ahead of the Fed’s rate cut.

    All of the voting FOMC members except one — Miran — voted in favor of the quarter-point cut, according to the central bank’s statement. Miran voted for a larger cut of 0.50 percentage points, the Fed noted.

    Powell has defended the Fed’s historical independence from political influence, emphasizing that monetary policymakers make decisions based on economic data. 

    A key question for consumers and businesses is whether the Fed trimming borrowing costs for the first time in nearly a year augurs additional cuts in 2025 and heading into 2026. Fed officials have two more meetings this year, set for October and December. 

    “The FOMC is now (sort of) on board with two further [0.25 percentage-point] rate cuts this year but continues to anticipate less loosening in 2026 than markets have recently priced in — in part because it has become more upbeat about economic and labor market prospects for next year,” Stephen Brown, deputy chief North America economist with Capital Economics, said in a report after the Fed cut. 

    The Associated Press

    contributed to this report.

    Aimee Picchi

    Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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  • Federal Reserve Cuts Interest Rates a Quarter Point | Entrepreneur

    The Federal Reserve, which last cut interest rates in December 2024, lowered interest rates .25% on Wednesday.

    Officials implied that there would be two more cuts to follow later this year. The committee meets in two months, on October 28 and 29. “In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook,” the committee wrote in a press release.

    Related: The Labor Market Has Changed From the ‘Great Resignation’ to the ‘Great Stay’ Because ‘Workers Aren’t Going Anywhere’

    EY-Parthenon Chief Economist Gregory Daco told Entrepreneur in a statement that, although inflation is picking back up, “economic activity and employment are simultaneously slowing,” causing the balance to tilt toward more rate cuts. He also predicted that there would be two more rate cuts to follow this year.

    Here’s how the interest rate cut could impact your wallet.

    U.S. Federal Reserve Chair Jerome Powell speaks at a news conference at the Federal Reserve headquarters, following the Federal Open Market Committee (FOMC) meeting in Washington, DC, on September 17, 2025. JIM WATSON/AFP via Getty Images

    Why did the Fed cut rates by a quarter percentage point?

    Economists and industry experts predicted a 94% chance of a quarter percentage point (0.25%) cut, following data released earlier this month that showed that hiring was slowing, and inflation was 2.9% in August, an increase from July’s 2.7% and higher than the Fed’s preferred 2% target.

    The central bank’s rate-setting committee, the Federal Open Market Committee (FOMC), has kept interest rates within the 4.25% to 4.5% range for the past nine months as its members analyzed economic activity. The FOMC decides on rate cuts based on two broad goals: minimizing inflation and maximizing economic activity in the labor market. Wednesday’s rate cut now lowers the range to 4% to 4.25%.

    Related: Here’s What a Federal Rate Cut Means for Small Businesses, According to Analysts

    When is the next Fed meeting, and what is expected?

    The Fed meets eight times a year in regularly scheduled meetings to set U.S. monetary policy. The FOMC sets the target range for the federal funds rate, the interest rate banks use to lend to each other, which influences broader rates that affect consumers, like credit card interest rates.

    The committee meets two more times in 2025: October 28-29 and December 9-10, according to the official calendar.

    Officials indicated two more possible rate cuts this year.

    How does the Fed affect mortgage rates?

    The Federal Reserve’s decision does not directly affect mortgage rates because mortgage rates are tied to 10-year Treasury bonds. So, a lower federal funds rate does not necessarily mean lower mortgage rates, Melissa Cohn, Regional Vice President of William Raveis Mortgage, told Entrepreneur.

    “The Fed cut will not cause mortgage rates to change,” Cohn said in an emailed statement.

    Instead, “how the bond market reacts to the Fed cut will determine the direction of mortgage rates,” and what Powell says during the press conference will “be key to market reactions,” she wrote.

    When faced with market uncertainty, investors buy Treasury bonds, driving mortgage rates down.

    However, the bond market has already recently responded to news of a possible rate cut, with mortgage rates dropping to a three-year low on Tuesday ahead of the Fed meeting. As of Wednesday morning, the average interest rate for a 30-year fixed-rate mortgage was 6.24%, one of its lowest levels since early October of last year.

    Related: Barbara Corcoran Says This Is the Interest Rate Magic Number That Will Make the Market ‘Go Ballistic’

    How does a rate cut affect credit cards?

    Credit card interest rates tend to move in alignment with the federal funds rate, per Bankrate. So the 0.25% cut could have an impact on credit cardholders with a reduction of 0.25% to their interest rates.

    Other market conditions, like inflation and the demand and supply of credit, affect the basis for most credit card interest rates. That’s why interest rates for credit cards as a whole have been increasing, from 15% in 2021 to more than 21% in 2025, despite rate cuts last year.

    Credit card companies are charging higher interest rates than four years ago, per Bankrate.

    Sherin Shibu

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  • US Fed Slashes Interest Rates by 25 BPS: How Will Bitcoin’s Price React?

    In line with most expectations and its hint last month, the US Federal Reserve made the first interest rate cut for 2025, reducing it by 25 bps.

    Most market commentators believed crypto and the rest of the financial markets had already priced in this cut, so it would be interesting to follow how BTC will react in the following hours and days.

    Recall that the primary cryptocurrency exploded in late August during and after Jerome Powell’s speech from Jackson Hole, when the Fed chair hinted that the US central bank will finally cut the rates.

    Experts anticipated a 25 bps rate reduction during the subsequent FOMC meeting, which took place yesterday and today.

     

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  • Video: The Two People in the Spotlight at a Pivotal Fed Meeting

    At this week’s pivotal Federal Reserve meeting, all eyes were on two people – Stephen Miran and Lisa Cook. Colby Smith, who covers the Fed for The New York Times, explains why.

    Colby Smith, Alexandra Ostasiewicz, Nikolay Nikolov, Laura Salaberry and Zach Wood

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  • Bitcoin Taps 4 Week High of $117K Ahead of Fed Rate Decision

    Bitcoin prices have tapped $117,000 twice over the past couple of hours as the asset reached its highest level since August 23, almost four weeks ago.

    BTC gained 1.5% on the day, and almost 5% on the week, but had retreated slightly to $116,600 at the time of writing on Wednesday morning in Asia.

    The move comes on the day that the US Federal Reserve is expected to lower interest rates for the first time this year. This will lead to greater liquidity and a potential cycle of monetary easing, which has been historically bullish for riskier assets such as crypto.

    Crypto Analysts Weigh In

    Economist Alex Krüger said he was ready for the dovish cut despite markets already pricing the move in.

    “Though my market views have not changed much. I’m bullish on equities and Bitcoin. The market often forgets how much BTC can move due to recency bias.”

    Rate cuts also result in liquidity flow from less-risky assets like treasury bills to high-risk assets like stocks and crypto, observed ‘Ash Crypto.’

    “As more cuts happen, liquidity flows into Bitcoin, and altcoins will increase,” he said before adding:

    “We already have major catalysts like ETF approval, pro-crypto administration and regulatory clarity. Once liquidity starts to flow, these catalysts will be priced in, leading to a parabolic Q4 rally.”

    “The last time the FED cut rates, the market pumped very hard,” said crypto analyst Sykodelic.

    Meanwhile, BitMEX co-founder Arthur Hayes spoke about the Fed’s “third mandate,” which is now being discussed.  Advocacy for yield curve control (YCC) signals a potential shift in monetary policy, which is good for Bitcoin, he alluded.

    Weakening the Greenback

    Excess liquidity also tends to weaken the US dollar as more dollars chase fewer goods and assets. Bitcoin, often viewed as a “digital gold” or hedge against inflation, historically benefits from a weaker dollar.

    The dollar index (DXY), which measures USD against a basket of currencies, has already weakened 12% so far this year.

    Speaking on CNBC on Monday, Fundstrat’s Tom Lee said the Fed “can actually reinject confidence by saying we’re back into an easing cycle,” before adding that a rate cut will be a “real improvement in liquidity.”

    He predicted that Bitcoin and Ethereum would make a “monster move” in the last three months of this year.

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    Martin Young

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  • Reporter’s Notebook: Behind the Fed’s jargon

    The Federal Reserve is expected to lower interest rates, and decisions that shape household budgets will be explained in woolly-mouthed Fed speak. “CBS Evening News” co-anchor John Dickerson explains.

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