Bitcoin prices are heading south. The leading cryptocurrency dipped towards $112,200 as investors rethink what’s next for interest rates. Federal Reserve officials are split, but many seem ready to hold rates steady in September.
Bitcoin (BTC) dropped 1.4% in the last 24 hours. It trades just under $112,300 right now, according to CoinGecko data. This slide is part of a wider slump hitting the crypto market. The total market value for cryptocurrencies fell 1.7% over the same period. Other big digital coins felt the pinch too. Ethereum (ETH) lost over 2%, settling at $4,213.
Just one week ago, Bitcoin reached a record high. It sailed past $124,000 on strong hopes of a U.S. Federal Reserve (FED) interest rate cut next month. But that excitement has cooled. Investors are now adjusting their expectations. They are waiting for Fed Chair Jerome Powell’s speech this Friday. He will speak at the Jackson Hole economic symposium in Wyoming. Everyone wants to know the future direction of money policy. Economic uncertainty hangs heavy in the air.
What the Fed’s Saying
The Fed’s July meeting minutes came out yesterday. They showed clear divisions among the central bank’s top officials. Some worried about a softening job market. Others pointed to stubborn inflation. This inflation saw a bump, partly due to global tariffs pushed by President Donald Trump. Most officials agreed it was not the right time to cut interest rates, as CNBC reported.
Cleveland Federal Reserve President Beth Hammack added to this cautious tone on Thursday. She backed the central bank’s careful stance. Hammack told Yahoo News in Wyoming, “Inflation is too high, and it’s been rising all year. If the meeting was tomorrow, I wouldn’t see a reason to cut interest rates.” Her comments highlight the support Powell has from many Fed bankers. They stand with his view, even as President Trump pushes for deep rate cuts.
Market Mood Shifts
This cautious talk changed how the market is betting. On the Polymarket prediction platform, the odds for rates staying flat next month jumped. It rose from 13% just a week ago to 41% in recent hours. This big shift shows investors are completely re-evaluating things. The CME FedWatch tool had shown a nearly 100% chance of a September rate cut just seven days prior.
The political scene also stirs the pot. A CNBC poll suggests President Trump might nominate his chief economic advisor, Kevin Hassett, as the next Fed chair. This move would make Powell’s Jackson Hole appearance his last as the U.S. central bank head. Such a change brings worries about the Fed’s independence. Trump has insisted on slashing rates by three full percentage points. That’s well below the current 4.25% to 4.5% range. Even figures like Jim Bullard, the former St. Louis Federal Reserve President, have called for rates 100 basis points lower, adding fuel to the fire.
The cryptocurrency market is on edge. The Fed faces a tough decision: how to cool rising prices without causing a recession. This is especially tricky with a job market showing signs of weakness. Powell’s speech at Jackson Hole will be vital. It should clarify how the Fed plans to handle these challenges. Investors in risky assets are already adjusting their plans in this uncertain environment.