Investors are betting heavily that the central bank will act, with CME FedWatch data showing odds close to 89% that borrowing costs will be lowered.

The momentum stems from mounting evidence that the U.S. labor market is cooling faster than expected. July’s job creation fell far short of forecasts, and revisions to previous months stripped away hundreds of thousands of positions from the official tally. For many Fed officials, that’s a signal that waiting could deepen the slowdown.

Michelle Bowman, one of the Fed’s more vocal policymakers, has argued that cuts should begin sooner rather than later. She believes starting in September could prevent the need for larger, more abrupt moves later in the year. In her view, the focus now should be on protecting employment, particularly with inflation still tracking toward the central bank’s 2% target.

She’s not alone. Minneapolis Fed President Neel Kashkari and San Francisco’s Mary Daly have both hinted that the time for easing may be close. Bowman has even floated the possibility of reducing rates at each of the Fed’s remaining 2025 meetings, which would mean three cuts before year-end.

For crypto markets, the implications are significant. Rate reductions tend to encourage risk-taking and pump liquidity into the system, conditions in which digital assets historically thrive. The last time the Fed entered a prolonged cutting cycle, Bitcoin and other major tokens rallied sharply.

Interestingly, Bowman downplayed the inflationary risk from Trump-era tariffs, saying they have yet to meaningfully affect consumer prices — a view echoed by Kashkari. That removes one potential obstacle to an earlier pivot.

With sentiment tilting toward monetary easing and policy hawks softening their stance, September could usher in a new wave of momentum for both traditional markets and the crypto sector. If expectations hold, traders may be entering the final weeks before a significant shift in the investment landscape.

The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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Filed under: Bitcoin - @ August 10, 2025 6:21 am