TLDR
- The crypto market is experiencing increased optimism as investors expect the U.S. Federal Reserve to cut interest rates by 50 basis points.
- Standard Chartered has raised its forecast, now predicting a 50bps rate cut at the September Federal Reserve meeting.
- The shift in expectations follows weak August job data, with only 22,000 jobs added, well below the 75,000 forecast.
- Bank of America also revised its forecast, predicting two quarter-point cuts in September and December.
- The prospect of looser monetary policy has fueled bullish sentiment in the crypto market, especially for Bitcoin and other digital assets.
The crypto market is seeing increased optimism as investors anticipate a more aggressive interest rate cut from the U.S. Federal Reserve. Standard Chartered has raised its forecast, now expecting the Fed to cut rates by 50 basis points at its September meeting. This adjustment follows weaker-than-expected August non-farm payroll data, with just 22,000 jobs added, far below the 75,000 forecast.
Standard Chartered Doubles Fed Rate Cut Forecast
Markets are now pricing in a near-certain rate cut from the Federal Reserve. Standard Chartered revised its expectations after the August employment data revealed a sharp slowdown in job growth. The bank now predicts the Fed will implement a 50-basis-point cut, double its previous forecast of 25 bps. The weaker labor market has fueled expectations for further monetary easing.
Bank of America also adjusted its forecast, now predicting two quarter-point cuts in September and December. However, Standard Chartered suggested that the September cut could be a one-time move. They cited factors like sticky inflation and fiscal easing, which may limit further cuts this year.
Crypto Market Responds to Easing Expectations
The prospect of looser monetary policy has lifted the crypto market. Lower interest rates typically make risk assets, including Bitcoin, more attractive. As borrowing costs fall, digital assets gain appeal, driving up their demand. Bitcoin, along with other cryptocurrencies, has benefited from this shift in market sentiment.
The renewed optimism is particularly evident in Bitcoin options markets. There has been a significant increase in open interest for December 2025 call options. Traders appear confident that favorable macroeconomic conditions could push Bitcoin to new heights, further driving the bullish trend in the crypto market.
The ongoing debate over the Federal Reserve’s monetary policy has also sparked broader economic concerns. Recently, the Department of Justice issued subpoenas related to mortgage fraud claims against Fed Governor Lisa Cook. This scrutiny has raised questions about the direction of U.S. monetary policy and the Fed’s independence.
