- Bitcoin rises 2% to $114,200 after Powell’s speech.
- Ether rebounds 8% following a 12% correction.
- U.S. stocks gain 1%, yields fall to 4.27%, gold up 0.6%.
Federal Reserve Chair Jerome Powell shifted the market narrative on Friday by indicating that a rate cut in September was under consideration, a remark that promptly altered expectations across global financial markets.
Speaking at the Federal Reserve Bank of Kansas City’s economic symposium in Jackson Hole, Powell said downside risks to employment were increasing and could accelerate through layoffs and rising unemployment.
That change in tone sent a shock through both traditional and digital markets: bitcoin, equities, bonds and gold all reacted within minutes of his comments.
Bitcoin rebounds 2% after recent 10% drop
Bitcoin (BTC) climbed about 2% to $114,200 following Powell’s comments, recovering some of the steep decline from earlier in the week.
The cryptocurrency had reached a record level above $124,000 roughly a week earlier, when market confidence in a September rate cut approached certainty.
However, as expectations cooled to 69% in the hours before Powell’s speech, bitcoin fell nearly 10% to $112,000.
CME FedWatch data showed that immediately after Powell spoke, the probability of a September rate cut rose back to nearly 90%.
That renewed confidence supported digital assets that had come under pressure as hopes for imminent monetary easing faded.
Ether jumps 8% after 12% correction
Ethereum (ETH) experienced larger swings than bitcoin during the same period.
The token corrected by about 12% after approaching its all-time highs, reflecting a deeper pullback in more speculative assets.
Following Powell’s remarks, ETH rallied nearly 8%, underscoring how sensitive cryptocurrencies remain to Federal Reserve signals.
The bounce suggests traders continue to position themselves around policy expectations, with ether’s larger moves reflecting higher 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 before Powell’s speech as investors priced in lower odds of a rate cut.
After the change in tone, U.S. equities gained more than 1%.
Treasury markets also recovered, with the 10-year yield slipping six basis points to 4.27%.
The U.S. dollar index eased roughly 0.5%, while gold prices rose about 0.6%, reflecting a broader shift toward assets that typically benefit from looser monetary policy.
Risk assets show increased sensitivity to Fed signals
In the days leading up to Jackson Hole, traders had positioned cautiously, expecting Powell to maintain a hawkish posture.
That stance contributed to selling pressure across risk assets, particularly cryptocurrencies.
The Fed’s pivot not only revived expectations for a September cut but also highlighted the fragility of investor sentiment.
These developments emphasize how closely risk assets remain tied to Federal Reserve policy outlooks.
Bitcoin’s correction and rebound, along with ether’s deeper pullback and recovery, illustrate that digital markets move in step with Fed communications, while equities, bonds and commodities display similar dynamics.