Markets Place Full Faith! Fed Widely Expected to Cut Interest Rates in September, Sending Crypto Green Across the Board

In August 2025, investor confidence surged as expectations solidified around a Federal Reserve interest rate cut at the upcoming September 17 meeting. Several data points and expert opinions now indicate near certainty of easing, igniting rallies across markets—including cryptocurrencies.

Probability of a September Rate Cut Reaches New Highs

After the July Consumer Price Index landed at 2.7% year-over-year and only 0.2% monthly, lower than anticipated, markets responded sharply. The CME FedWatch Tool now estimates a 90–97% probability of at least a 25‑basis‑point cut in September. In parallel, U.S. Treasury Secretary Scott Bessent publicly urged a more aggressive approach—calling for a 50‑basis‑point cut—further adding to easing expectations.

Market Reaction: Crypto and Equities Rally

Global markets responded decisively. U.S. indices including the S&P 500 and Nasdaq set new record highs, buoyed by optimism over impending rate cuts. Concurrently, the U.S. dollar weakened significantly while risk assets surged. Bitcoin soared to an all-time high around $124,000, supported by expected policy easing and favorable regulatory shifts.

Broader Economic Context and Internal Fed Debate

Despite strong rate-cut signals, Federal Reserve officials remain divided. Some, like Atlanta Fed President Bostic and Chicago’s Goolsbee, urge caution—pointing to inflation risks and uncertain labor conditions. Others, including Governors Bowman and Waller, are more dovish, backing moves toward policy easing.

Summary: What This Means for Investors

  • Markets: Bullish sentiment dominates across equities and crypto.

  • Crypto: A flood of liquidity favors digital assets—Bitcoin leads the pack, with altcoins likely to follow.

  • Fed Signals: Diverging opinions within the Fed suggest close monitoring of upcoming labor, inflation, and policy data.

  • Outlook: If cuts materialize as expected, we could see extended rallies. But volatility remains, tied to ongoing policy debate and macroeconomic shifts.

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