- Bitcoin rose 2% after the speech to $114,200.
- Ether rebounded about 8% after a 12% pullback.
- US stocks climbed 1%, yields fell to 4.27%, and gold gained 0.6%.
Federal Reserve Chair Jerome Powell signaled on Friday that a September rate cut is under active consideration, shifting the market narrative and immediately altering expectations across global financial markets.
Speaking at the Kansas City Fed’s annual economic symposium in Jackson Hole, Chair Powell warned that downside risks to employment have increased and could intensify through layoffs and higher unemployment.
That tonal shift reverberated through both traditional and digital markets: Bitcoin, equities, bonds and gold all reacted within minutes of his remarks.
Bitcoin bounces 2% after recent 10% decline
Following Powell’s comments, Bitcoin (BTC) rose roughly 2% to $114,200, recouping part of the earlier-week sell-off.
About a week earlier, market confidence that a September rate cut would occur had pushed BTC above $124,000 and toward record highs.
Expectations cooled to around 69% a few hours before Powell’s speech, and Bitcoin slid nearly 10% to about $112,000.
Immediately after the speech, CME FedWatch data showed the probability of a September cut jumping to roughly 90%, supporting digital assets that had been under pressure as hopes for imminent easing waned.
Ether rebounds 8% following 12% correction
Ethereum (ETH) experienced even larger swings than Bitcoin during the same period.
After climbing near its all-time highs, ETH trimmed about 12% as speculative tokens broadly pulled back.
Powell’s comments sparked an approximate 8% rebound in ETH, underscoring how sensitive cryptocurrencies are to Fed signals.
The bounce suggests traders remain positioned based on policy expectations, and Ether’s sharp moves reflect shifts in risk sentiment.
Stocks, bonds and commodities follow suit
Traditional markets mirrored the moves in digital assets.
The Nasdaq Composite had fallen about 3% in the days leading up to Powell’s address as investors priced in a lower chance of rate cuts.
When the Fed’s tone shifted, US equities rallied more than 1%.
US Treasury prices also rose: the 10-year yield dropped six basis points to 4.27%.
The dollar index slid roughly 0.5%, while gold climbed 0.6%, reflecting broad flows into assets that typically benefit from easier monetary policy.
Risk markets show heightened sensitivity to Fed signals
In the days before Jackson Hole, traders had positioned cautiously, anticipating Powell would maintain a hawkish stance, which contributed to selling pressure in risk assets—especially cryptocurrencies.
The reversal in messaging not only revived expectations for a September cut but also highlighted investor fragility.
These developments emphasize how closely risk assets track the Fed’s policy outlook. Bitcoin’s correction and subsequent rebound, together with Ethereum’s recovery, illustrate that digital markets move in step with Fed communication, while equities, bonds and commodities reflect similar dynamics.