Ethereum Rallies as Powell Hints at September Rate Cuts in Jackson Hole Speech

In his final keynote address at Jackson Hole, Fed Chair Jerome Powell seemed open to lowering interest rates. He talked on several ongoing fiscal problems and policy approaches to fix them.

Powell did not make any firm commitments and took great pains to describe the complicated situation. Still, his firm stance might be cracking, which could be bullish for crypto. Ethereum already surged over 7% following Powell’s speech.

Jerome Powell’s Speech

Fed Chair Jerome Powell’s speech at Jackson Hole has been hotly anticipated, as it may trigger big price moves for Bitcoin. Even if President Trump cannot replace him, his term will end next May. Therefore, this is almost certainly his last Jackson Hole speech.

In other words, if he was ever going to change his firm resistance to interest rate cuts, now would be the time. Billions in crypto options are set to expire today, and the US Treasury has been buying back debt. A lot is currently hinging on Jerome Powell’s speech, and he highlighted some ongoing problems:

“This year, the economy has faced new challenges. There is a significant uncertainty about where these policies will eventually settle, and what the lasting impact will be. While the labor market appears to be in balance, it is a curious kind of balance,” he claimed.

According to Coinglass data, over the past hour, total liquidations across the crypto market exceeded $200 million, including $180 million in short positions, with ETH liquidations topping $110 million.

This shows that Ethereum traders are betting on long positions and aiming for an all-time high after potential rate cut confirmation in today’s speech.

Crypto Short Liquidations After Powell’s Jackson Hole Speech. Source: Coinglass

Jerome Powell hammered on the impact of Trump’s tariffs, weak US jobs data, rising inflation rates, and more. He referred to several situations where the economic outlook could continue deteriorating, and seemed to hint at a possible rate cut:

“What are the implications for monetary policy? Our policy rate is now 100 bps closer to neutral than it was a year ago. The instability of the labor market and our unemployment rate now allows us to proceed carefully as we consider changes to our policy stance. The shifting balance of risks may require us to change our policy stance,” Powell claimed.

Meanwhile, speculative tokens saw the biggest jump based on Powell’s speech. SPX meme coin jumped 15%, while PENGU and DOGE surged 8%. In previous cycles, federal rate cuts were followed by meme coin seasons.

Biggest Hourly Gainers After Powell’s Speech. Source: CoinGecko

CoinMarketCap’s altcoin season index also surged to 44, showing growing optimism about increased liquidity in the market.

“Powell’s Jackson Hole speech struck a positive tone for markets, with investors now largely pricing in a rate cut as soon as September. He signaled that the Fed’s focus is shifting toward the growing risks in the labor market, noting the unusual slowdown in both worker supply and demand, which raises the risk of sudden layoffs and higher unemployment. While tariff-related inflation remains a concern, Powell appeared more confident that these pressures will be temporary. His comments suggest that protecting the labor market now outweighs inflation risks, giving markets clarity on the Fed’s bias toward easing. That sense of certainty has been welcomed by investors, helping fuel a bullish reaction,” said Nic Puckrin, crypto analyst, investor, and founder of Coin Bureau.

Still, Jerome Powell didn’t make any firm commitments. He described a few hypothetical scenarios where rate cuts would be urgent, but didn’t suggest that we’re quite there yet. For now, the markets can only hope for imminent future cuts. No promises.