- Bitcoin rises 2% to $114,200 after the speech.
- Ether rebounds 8% after a 12% correction.
- U.S. stocks gain about 1%, yields fall to 4.27%, and gold rises 0.6%.
Federal Reserve Chair Jerome Powell shifted the market narrative on Friday by signaling that a September rate cut is actively being considered, a remark that quickly reshaped expectations across global financial markets.
Speaking at the Kansas City Fed’s Jackson Hole economic symposium, Powell warned that downside risks to employment have increased and could accelerate through layoffs and higher unemployment.
This change in tone sent shockwaves through both traditional and digital markets, with Bitcoin, stocks, bonds and gold all reacting within minutes to his remarks.
Bitcoin recovers 2% after a recent 10% drop
Bitcoin (BTC) climbed roughly 2% to $114,200 following Powell’s comments, partially reversing a sharp decline earlier in the week.
About a week earlier the cryptocurrency had reached a record above $124,000 as market confidence in a September rate cut approached nearly 100%.
But in the hours before Powell’s speech, those expectations cooled to around 69%, and Bitcoin plunged almost 10% to about $112,000.
CME FedWatch data showed the probability of a September rate cut jumped back to nearly 90% immediately after Powell’s remarks.
That renewed confidence supported digital assets that had been pressured by fading hopes for imminent monetary easing.
Ether rebounds 8% after a 12% correction
Ethereum (ETH) experienced greater volatility than Bitcoin during the same period.
The token corrected by roughly 12% after nearly reaching its all-time high, reflecting a deeper sell-off among more speculative tokens.
After Powell’s comments, ETH bounced nearly 8%, illustrating how sensitive cryptocurrencies are to signals from the Federal Reserve.
The rebound suggests traders remain actively positioning around policy expectations, with Ether’s larger swings indicating a higher appetite for—or exposure to—risk.
Stocks, bonds and commodities follow suit
Traditional markets mirrored the move in digital assets.
The Nasdaq Composite had fallen about 3% in the days leading up to Powell’s remarks as investors priced in fewer chances of a rate cut.
After the change in tone, U.S. equities rallied more than 1%.
Government bonds also recovered, with the 10-year Treasury yield dropping six basis points to 4.27%.
The U.S. dollar index fell roughly 0.5%, while gold rose about 0.6%, reflecting a broader shift toward assets that typically benefit from looser monetary policy.
Risk assets remain highly sensitive to Fed signals
In the days before Jackson Hole, traders had positioned cautiously, expecting Powell to maintain a hawkish stance.
That caution contributed to selling pressure across risk markets, particularly among cryptocurrencies.
The pivot not only revived expectations for a September rate cut but also underscored how fragile investor sentiment remains.
The Bitcoin correction and subsequent rebound, along with Ether’s deeper drop and recovery, demonstrate that digital markets continue to move in step with Fed communications, while equities, bonds and commodities reflect the same dynamic.