September Rate Cut Back on Table After Powell’s Comments; Bitcoin Advances

Powell Signals Possible September Rate Cut, Boosting Bitcoin and Markets

August 22, 2026 — In a surprising shift from market expectations of a hawkish stance, Federal Reserve Chair Jerome Powell adopted a dovish tone during his remarks at the Kansas City Fed’s Economic Symposium in Jackson Hole on Friday.

Powell indicated that the evolving balance of risks may justify adjustments to monetary policy, explicitly putting the possibility of a September rate cut on the table.

“Downside risks to employment are rising,” Powell noted. “If those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.”

Following Powell’s comments, Bitcoin climbed approximately 2% to $114,200. U.S. equities rallied, with stocks rising over 1%, while the 10-year Treasury yield declined six basis points to 4.27%. The dollar index slipped about 0.5%, and gold prices increased by 0.6%.

Market Context: A Volatile Week Ahead of Powell’s Speech

In the days leading up to Powell’s address, risk assets—including cryptocurrencies—had faced significant downward pressure amid expectations of a continued hawkish Fed stance.

Bitcoin hit a record high above $124,000 just a week prior, buoyed by nearly 100% odds of a September rate cut. However, those odds fell sharply to 69% ahead of Powell’s remarks, contributing to Bitcoin’s nearly 10% drop to around $112,000. Since Powell’s speech, the likelihood of a rate cut has surged back to nearly 90%, according to CME FedWatch, and Bitcoin has rebounded strongly.

Ether (ETH), a more volatile crypto, experienced an even steeper correction, tumbling roughly 12% after nearing its all-time high, but has since bounced nearly 8% following Powell’s comments.

In traditional markets, the Nasdaq Composite dropped 3% over the past several days, reflecting diminished expectations for monetary easing before Powell’s dovish turn.