Powell Signals Potential Rate Cut in September, Lifting Bitcoin and Markets
August 22, 2026 — Federal Reserve Chair Jerome Powell surprised markets on Friday with a dovish tone during his Jackson Hole speech, suggesting that a rate cut in September could be possible.
Powell pointed to rising downside risks to employment, saying, “Downside risks to employment are rising. If those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.”
In response, Bitcoin jumped roughly 2% to $114,200. U.S. stocks gained over 1%, the 10-year Treasury yield fell six basis points to 4.27%, the dollar index slipped 0.5%, and gold prices rose 0.6%.
Market Reaction and Context
Leading up to Powell’s remarks, risk assets—including cryptocurrencies—had come under pressure amid expectations of continued Fed hawkishness. Bitcoin hit a record high above $124,000 last week on nearly 100% odds of a September rate cut. However, those odds dropped to 69%, and Bitcoin fell nearly 10% to about $112,000.
Following Powell’s speech, the likelihood of a rate cut climbed back toward 90%, according to CME FedWatch, prompting Bitcoin’s rebound.
Ether (ETH) suffered a sharper decline, falling about 12% from its recent highs before recovering nearly 8% post-speech.
The Nasdaq Composite declined 3% in the days prior, reflecting lower rate cut expectations, but rallied after Powell’s dovish comments.
