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- Fed may cut rates in October and December 2025.
- Quantitative tightening likely nearing its end.
- Bitcoin rebounds above $112K on market optimism.
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Fed Chair Jerome Powell’s speech on October 14 sparked market optimism as he hinted at a more dovish approach in upcoming monetary policy. Investors and crypto enthusiasts closely watched Powell’s remarks at the National Association for Business Economics meeting, hoping for clarity amid a fragile U.S. job market. Bitcoin responded positively, bouncing off support levels near $110,000, signaling renewed confidence among traders.
Powell’s Key Takeaways: Meeting-By-Meeting Approach
Powell emphasized a cautious, meeting-by-meeting strategy for potential rate cuts. While inflation remains stubbornly high, the job market shows signs of weakness, creating a delicate balance for the Federal Reserve. Powell noted, “You do have a bit of tension between labor market data – we see very low levels of job creation – and yet people are spending.”
Despite ongoing government shutdowns, Powell reassured markets that sufficient data is available for the next FOMC meeting on October 28-29. He also suggested that the Fed’s long-standing quantitative tightening (QT) program may soon conclude, opening doors for a more accommodative policy stance.
Market Anticipates Further Rate Cuts
Federal Reserve Governor Michelle Bowman reinforced the dovish outlook, projecting two additional rate cuts in 2025. Markets now widely expect a cut at the upcoming October FOMC meeting, with another potential reduction in December. This dovish sentiment has fueled optimism across both equity and crypto markets, easing fears of a prolonged tightening cycle.
Crypto Market Reacts Positively
Bitcoin has rebounded from the $110,000 support level to above $112,000 following Powell’s remarks. Veteran trader Arthur Hayes pointed out that the era of aggressive QT is likely over, advising investors to “buy everything.” While short-term gains are encouraging, analysts caution that volatility may persist as the Fed balances inflation control with economic growth.
There you have it, QT is over. Back up the fucking truck and buy everything. pic.twitter.com/kQbpBSOlOU
— Arthur Hayes (@CryptoHayes) October 14, 2025
Powell’s speech has shifted market expectations toward a more dovish Fed, offering temporary relief to both investors and the crypto market. With rate cuts likely and quantitative tightening nearing its end, the next few weeks will be crucial in determining whether this optimism can sustain itself.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
