Wall Street is increasingly betting on US interest rate cuts before the end of 2025. Simultaneously, political pressure from Donald Trump has intensified, as he becomes more forceful in calling on Powell to reduce interest rates.
As inflation cools and market expectations adjust, cryptocurrencies could benefit the most from a more relaxed monetary policy.
Trump wants Fed to reduce interest rates to 1%
This morning, Trump continued to attack Federal Reserve Chairman Jerome Powell. He called for a 3 percentage point rate cut and believes this would save the US economy 1 trillion dollars annually.
The US President also accused Powell of maintaining high interest rates for "political reasons."
Although the Fed has maintained stable interest rates at 4.25%–4.50% since June, speculation is increasing. Goldman Sachs now predicts the first cut will occur in September.
Meanwhile, traders on the Kalshi prediction market see a 40% chance of two cuts before the end of the year.
Probability of Federal Reserve interest rate cuts in 2025 according to KalshiThis change occurs after US inflation expectations significantly decreased. Consumer expectations for one year dropped to 4.4% in July, the lowest since February. This marks a 2.2 percentage point reduction in just two months—one of the largest two-month declines in history.
Long-term inflation expectations are also declining. The five-year outlook decreased by 0.8 percentage points in the past quarter, currently at 3.6%.
Overall, these trends suggest the Fed has more room to ease without causing concerns about a price spiral.
The cryptocurrency market is watching closely.
Bitcoin remains above $118,000, while Ethereum stays near $3,700. Both assets have surged after Fed rate cuts, benefiting from increased liquidation and investor risk appetite.
Could a major cryptocurrency price surge begin?
History shows that interest rate cuts have initiated significant cryptocurrency market rallies.
After the Fed cut rates in March 2020 during the COVID-19 crisis, Bitcoin rose from under $10,000 to over $60,000 within a year. Ethereum followed, supported by DeFi and Non-Fungible Token development.
If a new rate cut cycle begins in September, it could create similar conditions. Lower yields would push investors towards riskier assets, including cryptocurrencies.
Capital might also shift from bonds and cash to Bitcoin, Ethereum, and high-reliability altcoins.
Additionally, decreased inflation expectations and improved regulatory clarity—such as the GENIUS and CLARITY Acts—could strengthen investor confidence.
The convergence of these macro and policy signals could extend the current cycle beyond previous All-Time-High levels.
However, timing is crucial. Cryptocurrencies are near record levels, so momentum may depend on the speed and depth of cuts. A slow or shallow Fed response could limit price surge potential.
Important dates to monitor
The next Federal Reserve policy meeting will be on 29–30/07. Although the market predicts no changes, Fed comments will be thoroughly analyzed for September signals.
The next important date is 16–17/09, when FOMC reconvenes. This is considered the first realistic window for a rate cut, especially if inflation continues to decline.
Other important indicators to follow:
- July CPI data: Expected in early August, this will shape September decision expectations.
- Jackson Hole Conference (22–24/08): Powell's speech here could significantly alter market sentiment.
- US employment reports (August & September): Labor market weakness could reinforce rate cut rationales.
For cryptocurrency traders, these dates provide signals for potential market transition points. A confirmed Fed shift could trigger new buying pressure, especially in Bitcoin, Ethereum, and high-liquidity altcoins.
